Tax season is stressful for entrepreneurs and anyone working on the finances of a small business. Unlike most of your business issues, which come from within and are almost entirely within your control, this one lies squarely outside your realm of influence; there isn’t much a small business owner can do to change tax laws.
However, there are some strategies you can use to make your adherence to tax laws easier, and less stressful—and they’re not nearly as complicated as you might think.
Let’s start by identifying some of the major pain points associated with taxes, so we can better address them:
- Complicated rules. Taxes are complicated, even for the tax professionals who studied for years to understand tax laws inside and out. Trying to confront that complexity can be intimidating.
- Everything needs to be documented, which is an ongoing pain that can also lead to storage dilemmas.
- The time crunch. You only have a few months to finalize your business’s taxes, and you have to do them on top of all your other work. Finding the time to get those taxes done, and facing the encroaching deadline, can add even more stress to your situation.
- Finally, keeping all your documents and paperwork organized can be a nightmare—especially for more complicated businesses. If there are items missing, or if you don’t have complete information, it can bring the process screeching to a halt.
How to Reduce Stress
So what are the best ways to address all these pain points at once? These are some of the best all-around strategies:
- Get a digital document scanner. First, you need to get a digital document scanner, which can make your life easier in multiple ways. As most business owners know, collecting, sorting, storing, and organizing receipts is one of the biggest headaches in financial management; receipts come in many shapes and sizes, have non-standard printing layouts, and are easy to lose in the shuffle. A document scanner keeps everything digitally stored and organized, so you don’t have to dig through filing cabinets to track down all your records.
- Start as early as possible. It should go without saying that tax time will be easier if you start preparing sooner. One of the biggest issues business owners face is the time crunch—the looming deadlines that make everything more stressful. If they’re further away, they’re less of a worry, so you can take your time and focus on each task individually.
- Hire talented professionals. If you’re used to doing the work yourself using free online calculators, or with the help of an accountant who handles the majority of your other finances, you might consider hiring additional help for tax season. Recruiting someone, or at least getting consulting help from a pro, can assure you that you’re doing things correctly, and reduce the total time it takes to complete the process. You might even end up saving more money if they’re more familiar with tax law.
- Understand the best deductions. Even if you have someone working on your behalf, it still pays to know and understand the best deductions for small businesses. That way, you can actively prepare to take advantage of them as much as possible, and think strategically in the months leading up to tax season.
- Set clear deadlines and milestones. No matter what your approach is, or who on your team is responsible for completing the process, it’s important to set goals, deadlines, and milestones for yourself. That way, you’ll be able to track your progress over time, and you’ll be less worried about the impending final deadline. You’ll also feel better when you see yourself getting further in the process, and can organize your schedule to ensure those mini-deadlines are hit.
These strategies are intended to help you reduce stress by directly addressing the stressful source: the work of preparing for tax season. However, you can also lower your stress by incorporating important lifestyle changes, including eating healthier foods, exercising more regularly, and practicing mindfulness meditation. Together, a reduced workload, a better understanding of taxes, and more stress-relieving habits will make your tax season experience far more comfortable—and less overwhelming.