Virtually no entreprenur really loves the experience of paying taxes. At small scales of a business, the best way to ensure that you're paying only what you owe is to make sure you capture all business expenses in your books.
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Anyhow, back to taxes. You can, and should, have conversations with your accountant well in advance of tax season (which is approximately January through April). They've got lots of free time the rest of the year, and you have some planning to do.
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I generally talked to my accountants roughly quarterly when running a business, and before major moves like e.g. preparing to sell it. This is partly to let them give you early warning of things like "So Patrick you do realize that Japan is your 60% equity cofuonder right?"
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(I, uh, did not, but I'm really glad I found that out prior to spending 60% of the proceeds of the sale on e.g. a downpayment on a house.)
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Another reason is to get the help of a money-savvy professional who is outside the day-to-day of the business, to sanity check things for you. My accountants consistently picked up on e.g. impending cashflow issues or general health-of-business things when my head was in weeds.
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There's a complicated decision tree of how long to keep financial records, but explaining it would be accounting advice. "You should have a Dropbox account" is probably not accounting advice. I have never, ever, ever said "Man I am glad I threw away that business record."
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For really boring reasons, I had to show the State of Missouri (n.b. last set foot in it in 2004) a piece of paper issued in 2004... in 2016. Which I was trivially able to do because hard disk space is cheap and Dropbox / Tarsnap work very, very well.
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A surprisingly useful thing that I've done is wrote a one-pager "What happened this year" for each line of business, for consumption by the accountants. (In my case, heavily sourced from my public end of year review blog posts.) These get more valuable each passing year.
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"What should I do if I get audited?" You email your accountant and say "Hey a low-probability routine event has happened. What should I do about this?"
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I was audited by the State of Hawaii one year, because one of my companies had registered to file a bid with one of their agencies, and then they didn't get a business privilege tax return from us the next year. Responding to the audit took 45 minutes.
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General flavor of the interaction: "How much revenue did you have in Hawaii last year?" *SQL query* $180. "Wait, what. OK, you're done."
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In general, exuding professionalism will make many, many interactions with government (and other bureaucracies) go better for you. You want to be polite, compliant, and armed-to-the-teeth with well-organized records. And, again, this is why you pay your professional advisors.
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Accountants generate immediate ROI at any scale of business larger than a bake sale. My Japanese accountants, for example, caught that I had filed an exemption from consumption tax because all of my sales were exports of software. That was not an optimal filing.
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The optimal filing was to file a consumption tax return, saying that we had $0 of sales subject to consumption tax. And then claim back all the consumption tax our business had paid (on business expenses). Resulting in a tax refund of several times what I paid accountants.
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"Wait you can get radically different results from the same facts with just tiny changes in what you type on your return?" You sound very surprised, hypothetical person who probably has programmed before.
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If you read this far, you might want to check out our guide to business taxes: https://stripe.com/atlas/guides/business-taxes … If you're an Atlas company, we've got a quick survival guide for tax season here:https://stripe.com/atlas/guides/tax-season …
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