Being a small business owner or early-stage entrepreneur usually entails juggling multiple tasks at once. In addition to core business-related duties that bring in revenue (profit center) there’s also accounting, bookkeeping, payroll, and paying taxes (cost center). In the not so distant past, a business owner might need to hire a professional for each one of these tasks, essentially creating obstacles for small businesses who lacked capital and access to these resources.
But tax-focused technology is leveling the playing field for small businesses in a big way. As a career CPA and the founder of tax-focused tech startup, ComplYant, I’ve seen firsthand the mistakes business owners make—from not setting enough aside for tax payments to missing tax deadlines altogether. Other blunders include missing sales tax requirements, having messy bookkeeping systems, not having the right paperwork, and more.
Now more than ever, tax technology platforms are supporting small businesses so the other “stuff” doesn’t get in the way and make for costly missteps. Below are five such tools that will give your company a leg up on following difficult requirements, ultimately saving you money, time, and headspace.
Gusto is an all-in-one payroll service that also helps small businesses with benefits and HR. On top of that, Gusto has tools such as the Employer Payroll Tax calculator, making it easy to understand the total cost of making that new hire.
Before, you might be on your own to figure out Social Security, Medicare, and FUTA taxes for each employee or have to shell out the big bucks to get help. Or forced to use expensive enterprise tools like ADP or Paychex. Gusto is eliminating that extra legwork and making it easier and more affordable than ever to handle payroll and taxes, which are a huge part of small business management.
Have you ever wondered if your business is taking every tax credit possible, or heard other business owners brag about credits and large refunds and wondered how? The land of tax credits is voluminous and confusing so MainStreet stepped in to help solve that problem.
MainStreet’s platform uses technology to scour your expenses for tax credit opportunities and then gives you the amount on the spot without having to wait until tax day. For a business owner low on cash, this can be a great way to smooth out cash flow a bit.
The IRS awards research and development tax credits to innovative companies with employees to offset the cost of payroll tax. But often times entrepreneurs are uncertain how to access this incentives. Ardius helps business owners learn how much R&D credit that they qualify for and helps them claim it directly with the IRS.
One thing many people dream about is starting a nonprofit but get discouraged because of the paperwork and effort it takes to become a tax-exempt organization. Resilia is an online technology platform that supports existing charities as well as new ones to become tax-exempt. Obtaining tax-exempt status is crucial for any nonprofit to stay in business and execute its mission and vision.
Using Resilia, charities and nonprofits can get help with tax compliance, incorporation, and receive expert guidance. The platform can also streamline the grantor-grantee relationship and help with reporting.
5. Keeper Tax
One of the perks of being a freelancer is unregulated cash. Meaning get paid whenever you chose to take on a new project and receive cash in hand upon completion. However, the freedom that makes the freelance life so appealing also makes it scary.
The good news is there are tools out there like Keeper Tax that allow freelancers to manage 1099s, track expenses, and file tax returns. Freelancers are very different than corporations in the sense that freelancers usually have other forms of earnings and are freelancing as a side hustle. These unique circumstances create an extra need for tools that support the gig worker.
Before all of this tax-focused technology, small business owners would have to DIY it (and struggle or waste time) or pay out of pocket at a high price for a professional. Now, with these five tools and so much more, the barrier to entry to starting a business and maintaining a successful one is lower than ever.
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Shiloh Johnson is a long-time CPA and founder of ComplYant, a technology platform offering business owners and entrepreneurs a simple way to manage tax rules and requirements.