Tax Preparation Tips Every Business Owner Should Know
Prepare your taxes properly and you could get a nice kickback; prepare them haphazardly and you could be in a world of hurt. For business owners, tax preparation isn’t something to be taken lightly. You need to make sure you’re organized and thorough so that the IRS doesn’t take issue with your work. You can never be too on top of your taxes, so here are some tips to help ensure you’re ready when it comes time to file.
Going back through a year’s worth of bank statements is never fun. However, it only gets worse the longer you put it off. If you wait until April and you’re scrambling to find receipts while reconciling, you might not survive the process. Staying on top of your reconciliation makes it so much easy to file your taxes quickly and confidently, knowing all your business spending has been accounted for.
Take Care of Employee Paperwork Early
While you’re looking over your earnings and thinking about how things can be categorized and claimed, don’t forget that you have employee matters to deal with. You’ll want to make sure you get all the W-9s and 1099 forms handled at the end of the year so you’re not going back and trying to crunch numbers after the first quarter has already wrapped up. For some companies this can be a huge undertaking, so it’s something you can’t afford to put off.
Review Each Quarter
Tax preparation requires you to go through every financial matter from an entire year of business, which is a pretty overwhelming scenario. To make it less daunting, you should break the year into quarterly records and knock them out one at a time. It’s much more manageable to think about your finances in three-month chunks than it is a 12-month block.
There are so many reasons why it’s better to prep your taxes early. Some accounting companies will charge you less for filing help when you get it done before March. You also have the added benefit of looking over financial records while the information is still somewhat fresh in your mind. There are countless benefits that come from prompt preparation, while almost nothing good can come from waiting until the last minute to start filing.
Business owners need to take tax preparation seriously. When it comes time to get your taxes in order, hopefully you will have already done most of the work and it will be as simple as delivering some organized folders to your local tax expert.