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Tax season is always stressful, but learning how to utilize your POS system to assist with tax prep might help ease the burden.
A point of sale system can help with taxes because the software records sales and expense information that small business owners need to file their tax returns. POS systems can also help you find tax deductions that will save you money, minimize the amount of time you spend filling out tax forms, and reduce costly human errors.
Don’t have a POS yet? Check out the best POS systems for small businesses to get started.
Table of Contents
Your POS system is software that, when combined with a card reader or virtual terminal, allows you to accept digital payment types such as debit/credit cards and mobile wallets like Apple Pay and Google Pay.
With a good POS system, you can generate POS reports on expenses (such as inventory) and profits. These reports help you find small business tax deductions and are vital to accurately calculating your total taxable income.
The following basic POS reports are beneficial for all small business owners come tax time.
You should keep track of expenses such as utilities, rent on commercial properties, vehicle expenses (gas, maintenance, insurance, etc.), office supplies, expenses on travel, equipment repair costs, and software subscriptions to qualify for more specific tax deductions.
Most POS systems are not equipped to efficiently take in all this data independently. So, you will need to integrate accounting software like QuickBooks to keep track of expenses over time. Alternatively, you can save your receipts and manually add all your expenses when filling out your tax forms.
To choose a POS system that helps with your taxes, look for software that:
Want more help? Check out our article for help with choosing a POS system for more information. Also, check out our small business tax preparation checklist to help you file your taxes with minimal stress and no mistakes.
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