MAKING TAX TIME EASIER
Tax time can be daunting for small business, particularly those starting out but here’s a few tips to make tax time a lot less “taxing”.
Do what you have a passion for, let someone else do the taxes
Most small business owners are great at what they do, and if you have read any of my previous posts on starting out in business, you will know that I support doing something that you have a passion for. If you want to succeed at something, it makes sense that you are doing what you are good at it, including those mundane tasks within your business.
It makes sense doesn’t it, that if taxes are not your thing and you really don’t have a passion for the number crunching and filing your returns, then you might want to think about getting someone else in to do it for you.
How much is your time worth?
If you are reluctant to pay someone else to do your taxes, perhaps think about it a different way. How much is your time worth? put a value on your time, what are you worth an hour?
A tax agent, bookkeeper or accountant work with numbers all day, everyday, so they can probably prepare and file your taxes in the same time it takes you to shuffle the papers from side to side a few times. Meanwhile you are still sitting there, procrastinating and fantasizing about what you would rather be doing.
Take your hourly rate and multiply that by how much time you would normally spend on doing your own accounts, (or how much time you would rather be doing something else!), that gives you a starting point for setting your budget for your tax agent.
Most accountants and bookkeepers have packages to suit most budgets. To give you an idea, Business Allsorts has a basic plan for sole traders and small businesses starting at $69.00 per month, which includes a free subscription to Xero.
Affordable, easy and smart accounting software
Accountants and bookkeepers usually offer discounted, cloud based accounting software which makes keeping track of your sales and expenses, and keeping good records a lot easier, making tax time easier too.
If you invoice customers, I would recommend this as a basic business requirement. If you are determined to do your own taxes then cloud based software should be an absolute minimum to get through your taxes more quickly.
Xero or MYOB are the two main contenders for cloud based accounting and bookkeeping software, and you can usually get these at discounted rates through your accountant or tax agent.
Having used both Xero and MYOB, my personal preference for small businesses would have to be Xero.
Tips from the IRD
It makes sense that if the IRD want to get paid quickly and accurately, that they make it as easy as possible for small business. IRD have an awesome selection of tools and resources for small businesses to assist them with their tax requirements.
If you haven’t already, register for myIR. It allows you to file your returns online saving you time.
Making tax time easier
Download this poster published by the IRD for some more tips on how you can make tax time just a little bit easier.
Planning for Success
Here is a really good place to start at the planning stage or starting your business. New Zealand trade and enterprise have developed heaps of useful resources for businesses starting out.
Click on the planning for success workbook to download it.
To check out other free resources from New Zealand trade and enterprise you can head to their website:
Maree Wallace is the owner and operator of Business Allsorts, a company dedicated to helping small businesses with all aspects of creating, managing and growing their business. For more information on the services they provide and how they might be able to help yours, visit their website: businessallsorts.co.nz