Last Updated on: 22nd November 2023, 08:43 am
You’ll need to know some crucial facts about your taxes and finances if you intend to run a business. We’ll share some secrets you probably don’t know that will help you prepare for the journey. Keep reading to learn more.
1. Most Businesses Fall Under the Small Business Category
According to the Small Business Association, 99% of businesses fit into the ‘small business’ category. Thus, your business will likely be labeled as such if you have fewer than 500 employees. The good news is that you’ll also have access to various SBA loan programs and other resources.
2. IRS Auditing Is Common With Businesses
You could go your whole life as an individual without having to go through an IRS audit. However, the day might come if you own a profitable business. The IRS can go back three years and review your tax return to see if you need to pay back taxes on your business proceeds. If they find that you owe a balance, then they can collect on it for 10 years.
Therefore, it’s crucial to have a reliable accountant or tax expert in your corner. This person can help you to maximize your tax refunds and avoid situations that can leave you owing taxes. You’ll have to invest some money in hiring these individuals, but it will be well worth the cost.
3. Retention Is a Crucial Part of Economic Development
According to LinkedIn, retention and expansion, entrepreneurship, and recruitment are the three legs of economic development. Therefore, the efforts you put into these business areas will benefit the entire economy. The recruitment process should be a high area of focus. You can improve your success numbers by hiring experts to create compelling ads that speak the language of today’s job seekers. You can also offer onboarding bonuses and other benefits that entice workers to come to your business to work. This will create an influx of new workers, who will then earn the funds to put back into the economy.
4. Good Credit Isn’t Always Necessary for Business Loans
As a business owner, you might need to obtain funding for things like payroll, expansions, equipment, upgrades, vehicles, etc. You’ll be glad to know that you might not need good credit to obtain such funding.
Merchant cash advances are one of the many types of assistance you can get as a business. You may qualify for one of these loans once you’ve been operating for six months to two years. They are unique loans because lenders approve them based on sales or expected sales rather than a credit score. Thus, you should show them proof of how well your business does by giving them credit card receipts that indicate your profits.
The amount the lender approves you for will depend on the figures they receive from your receipts. You can use the loan for any purpose regarding your business. Many business owners use their loans for new equipment that can profit the business. For example, you might want to install self-service menus, specialized drink machines, sound systems, or televisions so that some of your clients can watch TV while they relax.
5. Grants Are Also Available
As a small business, you have access to various financial tools through the Small Business Administration. One of those tools is an expansion grant. This organization sometimes issues grants and loans to business owners in certain population categories. For instance, you might qualify for a minority or gender-specific grant. You may want to consider visiting the SBA’s site to see if you might qualify for such funding. You might be surprised to find an existing grant that can help you take your business to the next level.
Those are just a few concepts you may not have known about business finances and taxes. With the right people in your corner, you can obtain the funds you need to grow your company while ensuring your taxes are done appropriately.
