(& How To Stay Sane During It)
For most of the world, early spring means changing temperatures and the promise of summer just beyond the horizon. But for small business owners, and particularly for tax accounting professionals (and the IT teams that serve them), spring means months of 70-hour workweeks crammed into only a few weeks.
Another Tax Season Is Upon Us.
As a small business owner, you’re a natural problem-solver who loves a good challenge. But even the most flexible and even-tempered entrepreneur can meet their match when tax season arrives.
To help you and your team navigate these rough waters that tax season brings (while maintaining a work-life balance and avoiding burnout), we’ve put together these tax season tips provided by tax professionals themselves.*
Brush Up On The New Tax Plan
There’s a good chance you’ve been fielding frantic tax plan questions ever since the new tax bill was signed into law in late December (or trying to figure out how the new tax law will affect your small business). Even though the plan doesn’t technically affect 2017 returns, by arming yourself with the right information now, you can help make next year’s tax season a lot easier.
Here are a few key takeaways from the new 2018 Tax plan and what you can do today to benefit/be prepared.
● Taxpayers are now unable to deduct more than $10,000 in state and local taxes from federal returns.
● The individual mandate for health insurance won’t be repealed until 2019, so taxpayers are still liable to pay the penalty if they’re not insured in 2018.
● For most people, standard deductions and child tax credits will double, but personal exemptions are eliminated.
● Small business owners will be able to deduct the cost of depreciable assets in a year rather than amortizing them over several years.
● C corporations are now taxed at a flat 21% rate. Also, C corporations with less than $25 million in revenues can now use the cash method of accounting.
Startup founders and small business owners often wonder if they should set up a C corporation (vs. an LLC). The new tax law makes the C corporation penalty much smaller, so it’s worth taking this into account when deciding whether a C corporation is appropriate for your startup.
Another change to the tax law that may affect some staffing companies is the new limitation on interest expense deductions:
● Beginning in 2018, the deduction for interest expense is limited to 30% of adjusted taxable income plus interest income.
However, the 30% limitation only applies to taxpayers with more than $25 million in average gross receipts for the last three years.
● Individuals can no longer deduct business entertainment expenses, unreimbursed business expenses or other miscellaneous itemized deductions (sorry…)
Small Business Owners &
Tax Professionals Are People Too
As a small business owner, you need to make sure you take care of the most important piece of hardware and software in your office: You.
Here are some lifestyle tax season survival tips for you and your team:
Take Regular Active Breaks
It sounds silly to remind adults to take breaks throughout the workday, but you’d be surprised how much time small business owners (and their staff) spend at their desks, glued to their computer screens. In fact, the average person spends 12 hours sitting per day — and we’re willing to bet the number of hours your team sits gets even longer during your busy season.
Prolonged sitting can wreak havoc on your physical health, your mental health and, consequently, your productivity. To break the habit, consider testing the Pomodoro Technique with your team. This strategy requires you to commit to 25 minutes of uninterrupted focus followed by five minutes of rest, and then repeat until the task is complete.
Schedule Daily De-Stressing Activities
Whether it’s a fifteen-minute coffee break, or going for a short outdoor walk after lunch, by allowing yourself to stop and take a breath, you’ll not only return to your work feeling refreshed, but you’ll also set an example for your team to do the same. Tax season accounting can get pretty serious, and finding a way to blow off steam is crucial to staying in good spirits.
Prepare Friends and Family
When you’re working long hours and returning home each night too exhausted to make conversation, it’s easy to feel like you’re letting down your loved ones. Try to set expectations with your friends and family beforehand and choose at least one day each week to leave work early, and spend the rest of the evening with them.
Get Plenty of Sleep
Did you know moderate sleep deprivation can impair your cognitive performance as much as having a BAC of 0.05 or greater? For the sake of your work and your health, make sure you’re getting plenty of Zs. Try powering down your laptop at least two hours before bedtime.
Use Technology
As a small business owner, you know the important role technology plays in keeping your practice ahead of competitors. But when it comes to surviving tax crunch time, technology can also simplify many monotonous, time-consuming tasks.
For example, instead of estimating time spent on projects or trying to track down timesheets before you close out your work for a big account, invest in an intuitive time tracking solution and simple invoicing and billing software like SherpaDesk.
Offer Work-from-Home Opportunities
During tax season, you and your team need every extra minute of productive work time you can muster. But every moment spent commuting to and from the office is a moment wasted. If you don’t already, consider offering employees the opportunity to work from home at least one or two days each week.
There’s no doubt about it: tax season accounting work is grueling, not to mention the extra demands on the IT helpdesk teams that support them. But by putting some of these eight tax tips into practice, it will go a long way towards helping your team stay on top.
*Many thanks to Kevin J. Hedrick, CPA for his 2017/2018 tax tips.
Stay tuned for our in depth interview with Kevin about the new tax law and how to be prepared for it as a small business owner coming up in April.
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