For any business, tax season can be a tedious time of the year. Companies who chose to evade taxes have to deal with the IRS, which doesn’t translate well for their reputation. However, tax season doesn’t mean your business needs to fall under tremendous stress. All you need is to be smart about how you let your business handle tax matters. Not only does this put your business in a good position, but it is also beneficial to always get rid of technical forms as early as possible.
So here are a few tips that you can apply to your business and make sure that you file right away instead of asking for a date extension. Here’s what you need to do:
1. Perform Quarterly Review
It would help if you tried to perform quarterly reviews about your finances. It means to go through all of your income statements that pertain to your business. You want to observe what your profit and loss looked like and what expenses are required by your business to keep it in order. It will help you fill out your tax form right away.
2. Have Knowledge About Taxes
You can hire an accountant to help you file your taxes, or you can do it yourself. It’s better to get proper knowledge about how to handle tax matters of your business. For instance, you can opt for a master of taxation online to know the process inside and out. You don’t want to make crucial mistakes while submitting your forms since they are costly to resubmit. When you have a deeper understanding, such as knowing the proper terminologies, you know what your form needs to look like.
3. Inform Your Accountant
The accountant is the last working member of your staff that should be in the dark. They need to be in the loop about all matters that concern your business. You should make sure you provide them with periodic financial statements. If your company has expanded, they should know. They should also understand what your business’s fixed assets are. It makes for a clearer and transparent account with all the details.
4. Finish Bookkeeping Early
It would help if you didn’t leave bookkeeping to the last possible minute since preparing financial statements is lucrative. Around tax season, your business will already be busy, so you save on time and resources handling your tax matters early.
5. Collect Outstanding Payments
As a business, you may credit your clients. However, this needs to happen in a more structured way. Unless you impose a timed collection policy, you will miss out on actual payments. You should keep a system in place to make sure you have a record of outstanding dues. Send automated reminders to clients, which would prompt them to pay right away. Don’t hold out till the tax season.
6. Check for Deductions
You need to make sure you know what tax deductions look like for your business. You must consult or study them during the tax year instead of waiting for the tax season to pass. Staying on top of policies is essential since you will know what needs filing and deduct.
7. Separate Your Funds
You want to make sure the tax forms you submit can cover the legitimacy of your business. When you keep your personal and business transactions separate, you must maintain a record-keeping book. It will also make the filing process smoother since you will know what your individual and business statements should look like.
8. Buy More Time
Even though you should file right away, you can always ask for an extension if necessary. You want to make sure you have audited all the files, prepared the important statements, and have no errors. Instead of filing a poorly filled document, take additional time and do it right.
9. Build a Checklist From Last Year
You want to make sure you have all the proper documents before you file. It is easy to overlook documents when you can’t remember what all needs to go. Building a checklist from last year’s tax list can help you compare the changes in the filing system. It will also give you groundwork as you navigate through tax season. It also enables you to save time by keeping tabs on all your documents.
10. Don’t Wait for a Tax Packet
You may feel like you need to wait for your CPA to send you a tax packet so you can plan all your tax matters. But keep in mind tax season is as busy for you as it is for them. Most of the moves you may have planned may no longer be available for you. Meet them as early as possible if you need their professional advice to help you with your tax packet.
Wrap Up
As a business, tax filing is stressful as is. So you can make this process easy for yourself. Perform a quarterly review. It would be best if you learned about taxation. Keep your accountants in the loop. You should try and finish bookkeeping early. Make sure you prompt your clients to pay any outstanding payments. Check for all tax deductions.
Make sure your business and personal account stay separate from each other. If you need extra time, make sure you ask. It would also help if you kept a checklist from last year to compare changes. Finally, don’t wait for a tax packet, and with this, you can handle your tax situation.
I am Jones Smith and I am here to share my experience and expertise in writing. I’ve been writing articles for different publications for more than 6 years. I have a varied range of interests and that’s why I love blogging about different topics. In my opinion, blogging is a lot like acting, and I consider writing blog posts as an acting job. I am an entrepreneur by heart and there is nothing big or small when it comes to starting a business.