Your new restaurant might be a dream of yours that is just starting to come true, but the tax season can be a nightmare if you aren't vigilant all year round. Consider these year-round tax finance suggestions so that when it's finally tax time, you can deal with it more easily.
Have Separate Accounts
At the end of the tax year, you will have to report the income for your restaurant, and you will also have to account for supplies, equipment, repairs, and other expenditures you had during the year. If you're like a lot of people just starting out, you might be using the same checking account and credit cards for everything. That can be catastrophic when you're preparing your taxes; going through 12 months of numbers for all kinds of things can be extremely stressful. It can be even worse if you've made personal purchases or expenditures and those numbers are in the mix as well.
To avoid that disaster, keep separate accounts for everything. Have one card and one checking account for restaurant expenditures, for instance. Have another for sales. Keep your own finances somewhere completely different. This will make things much easier to figure out and explain if need be.
Spend Some Time Each Evening Filing
Filing receipts, invoices, and bills is probably the last thing you feel like doing after a long day of cooking and interacting with customers. However, if you don't get to those papers, they'll start to pile up. You might misplace some of them. This disorganization can mean big problems when you finally have to deal with taxes. To keep things under control, make a little time each night to go through your paperwork and file things properly. Develop a clear filing system so that the job goes quickly.
Classify Your Workers the Right Way
The difference between an employee and a contractor is something you need to know as soon as possible. If you have someone coming in every day when they're free to prep produce for the morning rush, for instance, they might be a contractor. However, if you require them to come in according to a specific schedule, they might be an employee. If you're paying people without properly classifying them or paying the employment costs and fees you could be responsible for, such as unemployment and disability, you may face fines. If you aren't sure whether you should consider your workers contractors or employees, consult an accountant.
This information can ultimately alleviate some of the stress you feel when tax season comes around. Enlist an accountant, such as Michael Salomon CPA, to help you with tax preparation throughout the year so that you don't have to be concerned when it is finally time for you to file your quarterly or yearly taxes.