Tax Preparation Tactics for Small Business Owners
Everyone hates tax preparation, but you can prepare for the annual chore with some simple steps that will make your accountant happy, save you time and ensure that you’re getting every deduction to save money on your taxes.
• Get organized.
Get a filing system for invoices, expenses and receipts. Use apps available for tracking mileage or storing receipts. If you do nothing else, this step will make your taxes much easier.
• Reconcile your books.
Every bank transaction should be matched with a corresponding entry in your accounting system. Sounds tedious? If you spend two to three hours when you get your bank statement each month, you won’t have a huge chore at the end of the year. This might be worth hiring a bookkeeper for or teaching your teen to do.
• Review your tax payments.
Compare your quarterly tax payments to your end-of-year figures. Hopefully, the figures are pretty equal, otherwise you’re either going to owe the government or the you’ve been allowing the government to use your money, interest-free.
• Get your W9s in order.
Save time on tax preparation duties by having independent contractors fill out W9s when you contact with them. Turn over all the information to your accountant and let them issue your 1099s as they go through your books.
• Set your appointment with your tax preparer early.
Business tax preparers book up quickly. Make your appointment for tax preparation before you go on vacation over the holidays. If you’re organized and have all of your documentation in place, it’s an easy appointment to manage once you get back to work after the new year. If you have forgotten something, you have plenty of time to get it to your accountant before tax deadlines.
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