For most people, April showers mean May flowers. For small business owners, they represent the dark clouds of tax season. Tax time can be difficult – you’re short enough on time already without the added demands of compiling all those forms, claims and deductions.

But if you think about tax season as an opportunity rather than a chore, those tax season clouds start to show their silver lining. After all, every tax season brings with it the chance to lower your liabilities and boost your bottom line.

Here are our tips for coming out ahead this tax season.

Keep track of all those little expenses

Those loose receipts can add up to some serious deductions (for example, you can deduct 50% of any business-related meals). Be proactive about collating and entering all of your receipts into your system as you go to ensure that you don’t miss anything – and to save last-minute admin. Many accounting systems have an easy scan-in option; you can also try tools like Shoeboxed.

Make the most of mileage deductions

If you use your car for business, you’ll want to deduct car expenses. There are two methods you can use here: a mileage rate or an actual expense rate, which takes into account things like repairs, gas and insurance. Note that you’ll need to log your mileage and note the percentage of time your car is used for work vs personal reasons. Do the calculations and see which method nets you the bigger deduction. Tip: non-business medical and charitable miles can also be deducted.

Max out these little-known deductions

Did you know that you can carry forward the healthcare tax credit? Take a look at form 8941 to calculate whether you can carry the credit forward or use it to claim expenses against. Another area you can make deductions is around property, including property used in manufacturing or for business or research. And bonus: some computer software also counts. Check out additional details on property deductions and depreciation here.

Find a great CPA

A good CPA does more than just file taxes. They can offer advice on how to maximize your deductions and how to structure your business for minimum tax liability. Plus they’ll be able to guide you through the recent tax reform bill and what that means for your company. Give them access to your accounting system and share last year’s return with them for reference.

Shift to a digital system

It’s a bit late to do this for 2017 but make this a goal for next year’s taxes. Go cloud-based with a system like Quickbooks, Xero or Gusto (for payroll) and you’ll find it that much easier to keep your accounts in order. Think easy invoicing, balance sheets, account reconciliation and more. Your CPA will appreciate it as much as you will.

Use VAs or contractors

To save on payroll and benefits in the coming year, look at hiring contractors rather than full-time employees. Independent contractors are in charge of handling their own taxes, which makes things easier on your end. Note that there are specific requirements about what constitutes an independent contractor vs an employee. You can learn more here.

Set up a retirement plan

Here’s another one for the coming year: retirement plans. These can be taken out for you, your business and your employees and can net some solid deductions. Employer contributions are tax deductible, and assets in retirement plans grow tax-free until withdrawal at retirement. It’s a good way to sock away money without having to pass a chunk of it along to the IRS (for now, anyway!).

Pay it ahead – and file on time

Finally, get those returns in on time! Late returns net a fine, which is simply wasted money. Similarly, late tax payments result in a fine and accruing interest, so pay attention to those all-important due dates. Pay your taxes throughout the year, consult with your accountant about estimated taxes, and you’ll be in good stead for having a hassle-free tax season the next time around.

That’s it! Here’s to a happy tax season!

Overwhelmed by the Admin Side of Taxes

Proper bookkeeping takes time.  As a small business owner, time is one thing you’re definitely short on!  Working with a virtual bookkeeper can not only ensure your financial books are up to date and ready for tax season, it will free up your time to focus on the business.  Learn more about our virtual bookkeeping services and schedule a time to take that task off your to-do list.