Finance Hacks for e-Commerce Business Owners in 2018

When it comes to e-commerce, taxation can be tricky. Not only is it integral to understand tax laws across different states and how they might affect your business, the new tax bill will result in a flurry of activity. The tax law, passed in December by the Trump administration, will cut the corporate tax rate from 35 percent to 21 percent and encourage small business owners to make more investments by allowing them to deduct the costs of depreciable assets every year.

Taxes for e-commerce businesses
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In short, these tax cuts will inevitably result in more financial activity — but such activity can make filing taxes a daunting proposition. But these aren’t problems you can reasonably avoid. Online stores are an essential part of the retail landscape, and even brick-and-mortar stores must take e-commerce seriously if they want to thrive in the years to come. Today, we’ll cover some shortcuts you can take to lessen the load of these tax changes on your mind.

Whether you're a freelance contractor, a small business owner, or the manager of a successful e-commerce website, here are a few hacks for the coming year regarding finance, taxes, and invoicing:

Being Prepared for Filing Your Taxes

While the holidays may have been a perfect time for some welcome unexpected surprises, tax season is the absolute last time of the year in which you want to be surprised. As a result of learning how to work independently, many online business owners try to brave the storm by handling all tax-related issues on their own. This isn’t the wisest move, unless you happen to be a fan of getting audited. Ethics are an important part of taxation, and one error can result in serious financial hardship. While it may be an extra expense, relying on a tax professional is the only way to ensure that all your bases will be covered when April rolls around.

If you want to be proactive in preparing for tax season as the year progresses, take some effort to streamline tracking your income and expenses; you should consider finding software or an app to help you do so. An example of this type of software is receipt scanning software. No longer do business owners need to keep shoeboxes filled helter-skelter with random receipts; they can simply scan the receipt, upload it to an application like Xpenditure, Receipt Bank, or IQBoxy Expenses, and rest assured knowing their data is securely stored for future reference.

These types of applications gives you instant access to relevant financial information, no matter where you are. Another bonus: Because your accountant won’t have to sort through all of the paperwork when taxes are due, you can save a few bucks while you’re at it. Do the smart thing — use the cloud to benefit your business.

Staying Connected

Speaking of which, the cloud opens a lot of doors for entrepreneurs who need to travel. If you regularly travel, it can seem difficult to keep a pulse on the financial goings-ons of your online business without a reliable internet connection. However, issues involving invoicing and expenses often require immediate attention, especially if your business is straddling a fine line between the red and black. This presents a serious conundrum to those involved in e-commerce. The solution to this problem is to stay connected to your business at all times.

There are many solutions to staying connected to your finances while on the go. Every year, phone and internet service providers are providing new and improved ways to connect to the internet, from portable Wi-Fi routers to free in-flight Wi-Fi texting. These options give e-commerce business owners more freedom to break away from the office while keeping a pulse on important developments.

Making the Most of Tax Deductions

As you use tax cuts this year to invest in your business, keep in mind that smart tax deductions can help you really stretch your dollar. There are two central ways to take advantage of tax deductions:

  • Making tax-deductible purchases: Online sellers are eligible for a wide range of tax deductions. After determining which you are eligible for, plan out your purchases to maximize your utilization of tax deductions. Most savvy business owners set aside a time in the final quarter of the year to make these purchases. This can help you meet your business needs and enhance your services without breaking the bank. Just be sure to pay for your purchases before the end of the year!
  • Recouping from fraudulent purchases or defaulted payments: Making a sale only to receive partial or no payment can sting. Whether the purchase was made fraudulently or the customer faced unforeseen financial hardships, you shouldn’t be the one to suffer on their behalf. Fortunately, the IRS allows business owners to claim the costs of such expenses as tax deductions. Not claiming these instances is tantamount to flushing money down the drain.

These are a few tips for business owners looking to keep their heads above water in the new year. Tax cuts mean new investments, and new investments mean new tax concerns when it comes to filing. Use these financial hacks to simplify the process, and make investments knowing that you will be secure. For more advice on getting started on the right foot in the new year, continue reading on QuartSoft.

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