Q: Dear Ruchi, I’ve been a business owner for a couple of years now, and every tax season still catches me off guard. No matter how hard I try to stay on top of things, I always feel like I’m scrambling at the last minute – and I really want that to change. What are some of your best practices for handling business taxes throughout the year so I’m not blindsided when tax time rolls around? I’d love to feel more prepared and confident this time next year.
A: Oh girl, you are so not alone in this! First of all, big hug and zero judgment – business taxes can be overwhelming for even the most organized business owner. So, let’s take a breath and get you set up to feel confident next tax season.
Here’s what I recommend to avoid that year-end panic:
1. Create a “Tax Cushion”
Set up a separate bank account for taxes and start stashing away a percentage of every payment you receive. Think of it as your cozy little financial safety net – something that has your back when tax season rolls around. This isn’t about restriction – it’s about relief.
2. Do a monthly money date.
Once a month, pour a cup of tea, light a candle, and spend some time checking in on your numbers. Categorize expenses, upload receipts, look at what came in and what went out. Make it special, make it sacred. You’re not just tracking money – you’re nurturing your business.
3. Ask for help if you need it (no shame zone!).
Hiring a bookkeeper or using accounting software can be a game changer. You don’t have to DIY everything, and letting someone support you with your books is a total power move. You deserve ease! At Watch Her Prosper, we provide women with the tools they need to feel empowered in every step of their financial journey.
4. Don’t forget those write-offs!
Anything related to running your biz – coaching, courses, software, taking a client to a celebratory dinner? Track it. Save the receipts. You’ll be shocked how much adds up when you’re consistent about it.
5. Check in with a tax pro mid-year.
You don’t have to wait until April to get clarity. A mid-year check-in can give you a snapshot of what you might owe and what moves you can still make to reduce that bill. Bonus: You’ll walk into Q4 with major confidence.
Bottom line, beautiful: you’re not behind. You’re learning, growing, and doing your best. Start small, stay consistent, and before you know it, you’ll be handling taxes like a seasoned pro.
You’ve got this. And I’ve got you.
Here’s to your prosperity.
Ruchi
