It’s tax time. If you’ve already filed and everything was smooth and organized, this article isn’t for you. This is for those currently digging through piles of records and unorganized receipt folders, promising themselves to be better prepared for the next year. It happens. We’re all human and lead busy lives, especially business owners. Although it may be too late to save you from yourself this year, now is the time to get organized for next. Here’s how:
#1 Organize Your Records- All Year Round
By setting up a filing system right from the start, you can bypass the headache. A great approach is to invest in accounting software. Your checking accounts can be linked to the software, cutting down on data entry. Those financial records can also be linked with whichever tax preparation software you use, which shortens the time it takes to file a return. Another reason for keeping good records: Owners need to provide financial numbers for potential lenders or investors.
#2 Know Your Deductions
There are often missed deductions which are associated with home offices, meals/entertainment and travel. Track all of these things closely throughout the year as they can be huge for a small businesses owner who is usually always working. See the NFIB’s resource on Commonly Missed Deductions. Also, check out Section 179 Deduction for a clear idea of what else you can deduct. Tax laws are complicated, but a tax professional can identify tax breaks and deductions you might otherwise miss.
#3 Hire an Accountant Now
An accountant or CPA can keep you on track, answer any questions and provide you with information and resources. Ask yourself how much your time is worth. If you get an accountant to take care of time-consuming tasks like finances and taxes, it’s likely they will cost less per hour than you would pay yourself. This will free up your extra time to run your business and generate revenue.
#4 If You Owe
Despite all of the diligent work in preparing your tax returns, you may still have a hefty bill to pay state and Federal agencies. Our clients have discovered that there are many uses for extra cash in the spring season. One is tax payments, while others relate to potentially tax deductible facility upgrades, new equipment, payroll, and more. Feel free to call us, if we may be of assistance to you for funding.
As with anything to do with the government or taxes — if you really want to stay-top of this information, meet with your tax advisor and frequently check for updates on IRS.gov.