{"id":816,"date":"2020-04-01T00:00:00","date_gmt":"2020-04-01T00:00:00","guid":{"rendered":"https:\/\/www.daysmart.com\/pet\/blog\/tax-day\/"},"modified":"2025-02-03T15:54:24","modified_gmt":"2025-02-03T15:54:24","slug":"tax-day","status":"publish","type":"post","link":"https:\/\/www.daysmart.com\/pet\/blog\/tax-day\/","title":{"rendered":"Is Your Grooming Business Ready for Tax Day? \u00a0"},"content":{"rendered":"
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With Tax Day fast approaching, now is an ideal time to reassess your business\u2019s ‘tax readiness.’ Operating a small business has always presented potential tax reporting challenges, especially if you\u2019re not using a software platform<\/a> that provides detailed performance and payroll reports<\/a>. We\u2019re here to help clear up the confusion\u2014let\u2019s explore common pitfalls, how to avoid them, and tips to stay organized for a smooth tax season!\u00a0<\/p>\n\n\n\n

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Common Pitfalls<\/strong> <\/p>\n\n\n\n

The most common problem in the grooming industry is tips. Employees are responsible for accurately reporting the tips they receive, but the employer is not free from obligation<\/a> to report on these. Complexities can arise when multiple service providers are splitting tips on a single client service. If your systems don\u2019t allow you to accurately report the distribution of these payments, you could be reporting that income as having been received by one person, unfairly increasing their tax burden. <\/p>\n\n\n\n

Complex commission structures can also create hassles for employees unless you\u2019ve properly defined payments within the software. You may offer certain commission rates for services but other commissions for products. The accuracy of the payroll records<\/a> you generate drives the accuracy of your reports on the tax liability of employees (and contractors). <\/p>\n\n\n\n

Accounting Integration<\/strong> <\/p>\n\n\n\n

QuickBooks (or your preferred accounting software) is a great way to record your business expenses and your income details. However, if you are using business management software<\/a> to run all other aspects of your business (e.g., appointment scheduling, inventory management, payroll) you\u2019ll ideally want to integrate these systems to maximize the software\u2019s capabilities. Simplifying this connection also means fewer reports for you to print or export for your accountant or tax preparation service. <\/p>\n\n\n\n

Classify Your Workers<\/strong> <\/p>\n\n\n\n

The grooming industry frequently classifies some workers as employees<\/a> and other workers as independent contractors. The reporting requirements and tax implications for both are different, but equally important. Independent contractors typically rent some space within a business. They do their own advertising, set their own schedule, and maintain their own client relationships. People who rent space within a shop are required to supply a 1099 tax form declaring the amount of rent paid during that taxable period. This is far from common practice, but it is the law. <\/p>\n\n\n\n

Deliberately misclassifying a worker is a crime. Don\u2019t do it\u2014even if they ask you to! The penalties can be significant, and you could be opening yourself to further scrutiny by tax officials. <\/p>\n\n\n\n

Deductions<\/strong> <\/p>\n\n\n\n

The IRS describes legitimate write-offs as \u201cboth ordinary and necessary.\u201d This means that they deem expenses as \u201cordinary\u201d if they\u2019re standard for someone with the same job, and \u201cnecessary\u201d if they are central to the performance of the job (no, lattes don\u2019t count). You\u2019ll be well served to deduct only expenses for which you have documentation. Didn\u2019t save your receipts? Comb through credit card and bank statements from last year in search of qualifying expenses\u2014it could be very worth your while. Any questions you have about the validity of deductions are best addressed by a certified financial planner or tax preparer. Better safe than sorry. <\/p>\n\n\n\n

Some deductions are obvious, such as rent, capital expenses (like furniture), business expenses (like advertising<\/a>), and charitable donations. However, others may not be as apparent. For example, the fees to renew your professional license may be deductible, along with any expenses incurred while attending an industry trade show or educational event. <\/p>\n\n\n\n

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Ch-Ch-Ch-Changes<\/strong> <\/p>\n\n\n\n

Change doesn\u2019t have to be scary! Staying informed is one of the best ways to prepare your small business for tax season. You can stay up to date with any changes that may affect you by visiting the official IRS website<\/a>. Platforms like QuickBooks<\/a> also provide helpful resources, such as templates and informative blogs. <\/p>\n\n\n\n

Reporting<\/strong> <\/p>\n\n\n\n

A recurring theme in this blog has been reporting<\/a>. The ability to generate accurate reports on what was done, who was paid, and when is critical at tax time. If you\u2019re managing your business with paper ledgers<\/a> or shoeboxes full of receipts, this could make it challenging to easily answer the many questions required for a tax return. <\/p>\n\n\n\n

While switching to business management software at this point won\u2019t help with last year\u2019s taxes, now is the perfect time to commit to implementing one for this year. If you were savvy enough to adopt software from the start, you\u2019re likely enjoying the convenience of answering your accountant\u2019s questions with the push of a button. Many of these software suites offer dozens of reports to address any question that might arise. <\/p>\n\n\n\n

Next Steps for a Stress-Free Tax Season<\/strong> <\/p>\n\n\n\n

Running a pet grooming business means juggling a lot of financial tasks, but don\u2019t worry\u2014we’re here to help you stay organized and stress-free. We hope this blog has given you a fresh perspective on your business\u2019s tax readiness, empowering you to tackle Tax Day with confidence. To make things even easier, download<\/a> our Pet Groomer Financial Wellness Checklist to stay on track.\u00a0<\/p>\n\n\n\n

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Download Checklist<\/a><\/div>\n\n\n\n
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Ready to take the next step? Book a demo<\/a> today and see how DaySmart Pet can help you work smarter, not harder, during tax season!\u00a0<\/p>\n\n\n\n

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With Tax Day fast approaching, now is an ideal time to reassess your business\u2019s ‘tax readiness.’ Operating a small business …<\/p>\n","protected":false},"author":14,"featured_media":815,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[12],"tags":[32,54,33,34,60,59,58],"class_list":["post-816","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-blogs","tag-pet-care","tag-pet-groomer","tag-pet-groomers","tag-small-business","tag-tax","tag-tax-day","tag-taxes"],"acf":[],"yoast_head":"\nDaySmart | Is Your Grooming Business Ready for Tax Day? \u00a0<\/title>\n<meta name=\"description\" content=\"Thousands of pet pros use DaySmart Pet grooming & boarding software to manage appointments, schedule staff, & so much more. 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