An easy guide to keep handy before your next e-file is due.
E-file is one of the best things to ever happen to taxes. Before the ability to e-file, everything was manual, including form completion, records submissions, and tracking your financial records. Electronic filing is a breeze compared to the old-school method of filing your small business taxes.
But the simplicity of filing doesn’t mean you can slack on the preparation. Take a look at the benefits of e-filing, plus read our quick guide to what you need to do to prep for your next e-file.
The Benefits of E-File
Besides the obvious electronic access e-file gives you, some other aspects will benefit your business.
First of all, e-filed taxes are more accurate. Hand-written forms might be hit or miss, depending on who is filling them out. You can’t have illegible electronic data. E-file taxes are also faster to file because they don’t have require printing, signing and sending via snail-mail. Just click send, and that’s it – tax filing complete!
Additionally, filing electronically means you have a permanent record of your tax filing for future use and reference. No more digging through filing cabinets to find information from past taxes. And best of all, if you’re expecting a tax return, e-filing means you’ll get your refund faster too.
How to Prep for Your Next E-File
Preparation is the key word when it comes to your taxes, no matter what method you’re using for filing. Here is a checklist you can refer to when you’re ready to start the process.
- You’ll need the receipts from all your product sales or services provided by your business, including your sales record. You will also need to include information on any interest earned by your business bank accounts. Don’t forget to include any other income accrued by your company from other sources over the year.
- Gather information on any costs associated with your inventory. This includes any purchases to add to your inventory as well as any materials and supplies used to create that inventory. It’s important to include any tracking of materials, supplies, or products removed from inventory for personal use.
- This is a broad category, but it’s important to make sure you can take advantage of any deductions for the cost of running your business. Expenses must include everything from advertising to toilet paper. If it is a cost of running your business, include it. A basic list of general expenses includes phones, computers and electronics necessary for running your business, as well as transportation and travel costs including airfare, mileage, hotels, meals and taxis. Also collect information on depreciation of your business assets, business insurance, professional fees for lawyers, accountants, and consultants, office supplies, rent, wages to employees, commissions to subcontractors, health insurance and facility repairs.
Other Considerations for Preparing to E-File Your Taxes
Once you have all your ducks in a row, there are a few other things to keep in mind. First, pay attention to deadlines. No matter what type of company you own, you must file your taxes on time. Business taxes are usually due on April 15th, but there may be other forms with different filing requirements.
The second consideration when it comes to your taxes is hiring an accountant. If all this information made your head spin, you’re not alone. Filing business taxes is not for the faint of heart, nor is it for the inexperienced. An accountant will keep track of your financial information and records throughout the year, so you don’t have to do that last-minute scramble to gather all the information required by the IRS. They will also take care of the tax preparation and filing for your company so you can focus on what you do best: run your business.
There are no reasons to file your taxes manually, and there aren’t any good reasons you should be doing them yourself. Hand the reins to a professional and take the stress and worry out of tax time.
Learn more about how e-file services can help your business, and download a free report on maximizing your use of QuickBooks here.