Prepare for Taxes Year-Round
Tax season can be stressful and time-consuming. It can be filled with late nights digging through receipts, spreadsheets and looking for paperwork. It’s even more stressful knowing that if you’re out of compliance your business could face heavy penalties.
But how do you go from scrambling to gather everything in one season, to keeping your taxes under control year-round? By being proactive, you’ll be more organized and have a stream-lined tax-filing method. Try these tips to help ease the process.
A tax professional is an expert in the tax preparation field. Known as Certified Public Accountants (CPAs), Enrolled Agents (EAs), or Tax Attorneys, they can help you as much or as little as needed. Working with a certified tax professional can ensure you’re staying up to date with the ever-changing tax laws and regulations. They can also help you take advantage of deductions, write-offs and create a plan.
Income is the cornerstone of your business and each month you’ll want to track how much income you are generating. In order to not fall behind on this, schedule a date on your calendar each month to track your income. This prevents it from piling up over time turning it into a big task.
Trying to remember all of the spending done throughout the year is nearly impossible. In addition to tracking your income monthly, it can be beneficial to track your expenses on a monthly basis (or even weekly). Save your receipts and keep them all filed together for easy access. It’s important to know where these are so you can deduct expenses from your income.
How do you keep track of all of this? From simple to complex, there are many resources, software and apps built to help you keep you track everything related to your business depending on your needs. These tools can make accounting as simple as possible by balancing your books which in turn will get you ready for tax time.
Keep Personal and Business Separate
To avoid any confusion, make sure you’re keeping track of your personal and business items separately. The IRS wants you to keep your personal and business assets separate. Keeping them independent will also save you the headache of having to dig through personal records to find your business items.
Set up a separate bank account for your business and only make business purchases using your business’ credit card. This also applies to the phone you use for your business.
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