Don't Mess with Uncle Sam: C-Store Tax Guide

Written by Lori London | Feb 8, 2017

Tax Season is well underway, and while most of us would probably like to think about taxes as little as possible, it’s important that both you and your store are ready. Between filing your own business’ tax returns and your consumers filing theirs, there is plenty to consider between now and April 18^th.

Work with Professionals

The tax laws can be tough to understand, and with your business’ success to consider, you’ll want to avoid making any mistakes. The IRS has quite a few rules when it comes to filing taxes, and navigating this landscape properly can help you avoid a host of fines or penalties. Having a trustworthy accountant on your side for not only tax season, but the entire year, will help ensure that you are filing correctly and getting the most out of your business investments. Make sure that whatever tax preparer or accountant you choose to work with comes with the proper credentials, great references, and a good understanding of your business and any unique situations.

Be Aware of Your Liabilities

The small business owner, especially the owner of a convenience store, has many obligations when it comes to taxation. Make sure you are educating yourself on the complexities involved with filing taxes as a c-store owner to avoid being overwhelmed when it’s time to file and pay. Understand the common problems that convenience store owners have when filing taxes like healthcare mandates, depreciation, and state-compliant sales tax³. Having an accountant to work out details and do the heavy lifting is important, but so is being aware of what is happening with finances yourself.

Decide How You Will File

When you consult your accountant or other advisers, they will likely suggest some good strategies for reducing your total tax bill. One great way to get the most out of your business at tax time is to accelerate deductions and defer income. This way, you can possibly minimize your current income tax liability and eventually report deferred income when your business is likely in a lower tax bracket.

If you are eligible to use the cash-method for tax purposes, you have a couple options for deferring some taxable income¹:

If you have recurring expenses that you normally pay early, charge them to a credit card specifically issued to your business. You’ll be able to claim these deductions for 2016 but won’t have to pay the credit card balance until 2017.
If you pay expenses with checks and mail them a few days before year-end, you can deduct them for the year in which they were mailed. The checks won’t be cashed or deposited until early the following year.

There is little that can be done on the income side for c-store taxes, but depreciation and other bonus write-offs can help. Also, make sure you’re up to speed on the tax credits that you or your business may be eligible to receive, and watch some of your recent activities like repairs and 401(k) investments pay off.

Don’t Miss the Deadline

You could rack up quite a bit of money if you fail to file or pay your taxes on time. Make sure you are ready well before the April 18^th deadline and have already made arrangements for paying anything you might owe. Paying taxes is no fun, but facing the tough consequences of falling behind or avoiding them altogether isn’t either.

After you’ve sorted out your plans for filing your taxes, make sure you have all the proper paper work and documents to back up what you’re reporting. The IRS doesn’t audit many of the tax returns they receive but when you are filing as a cash business, they will carefully review your numbers and you don’t want to be left unable to prove your store’s legitimacy.

Once you've filed your own taxes, make sure your store is prepared to handle the busy tax season and the spending your consumers will be doing. Check out our store preparation guide.

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