Tips for Tackling Taxes as a Small Business Owner

Kevin Kerridge, EVP, Direct and Partnership Division at Hiscox discusses how small business owners should prepare to make this year’s tax season as stress-free as possible.

Idea Café: Kevin, what are the biggest challenges small business owners face when it comes to tax preparation?

Kerridge: The biggest challenge is somewhat simple: time. Small business owners are extremely busy and are never really “off the clock.” Oftentimes, there just isn’t enough time in the day for all that running a business entails, including completing your taxes. The thought of completing your own personal taxes can be daunting and adding in your business’s taxes makes the whole process that much more stressful. Luckily, there are ways to be prepared.

Idea Café: Is there anything that small business owners can do to set themselves off on the right foot before completing their business’s taxes?

Kerridge: Try and eliminate surprises and last-minute stress by using an online checklist to confirm that you have all necessary documents needed to complete your taxes. Make the process as pain-free as possible by having everything in one secure place and taking advantage of online resources, rather than wasting time searching for lost documents or wondering what files you may need. Many well-known, easy-to-use personal income tax software programs, such as TurboTax and H&R Block, also offer business tax options, too. And don’t forget about your personal taxes – completing these earlier in the year will help put some distance between these and your business tax deadlines.

Idea Café: Are there any important write-offs that new small business owners may be unaware of?

Kerridge: Absolutely. Even if you’ve been completing your personal taxes for years, you probably don’t know all of the exemptions that business owners can claim. Some of these write-offs include home office deductions, startup costs, inventory, office supplies, mileage, software, cell phone, retirement contributions, and applicable insurance premiums. Take the time to go through any potential return options to make sure you don't forget any or miss out on the opportunity to save a little money.

Idea Café: What do you recommend for small business owners that feel overwhelmed by the tax process, especially if they’ve never completed them for a business before?

Kerridge: Think about outsourcing some or all of your tax preparation. Aside from avoiding any errors, your peace of mind and time saved is invaluable. This can be especially helpful for calculating payroll taxes, which can be tricky. If you do hire someone, consider using the time you saved by doing something that will better your business or further your professional development – like attending a networking event or an industry-related workshop. Even using those extra hours you could have spent on taxes for some R&R will be money well spent.

Idea Café: Is there anything else that small business owners can do to get organized during tax season?

Kerridge: In the spirit of getting organized, tax season is a great time to set yourself up for success for the coming year. Don’t just stop at taxes, though. There are a variety of things you can do to make sure your business is in check. For example, make sure that your liability insurance is up-to-date and you have a copy of your ACORD certificate for the year ahead. Doing these things proactively will only make next year easier.

Kevin Kerridge is Executive Vice President of the Direct and Partnership Division for Hiscox USA, the US arm of the global specialty insurer. A Partner at the firm, he currently leads their small business insurance practice. Sixteen years ago, Kevin started Hiscox’s Direct and Partnership business in the UK, building it to 80,000 customers and left in 2009 with a recognized market leading position in the small business arena. Under Kevin’s leadership, Hiscox was the first US insurer to enable office-based businesses to get real-time quotes and buy online.