The importance of preparing for tax preparation season.
Tax preparation season isn’t just about filling out the form and sending it in to the IRS. There is so much more to it than that. You will find that properly preparing for a meeting with your tax advisor will make you feel like you’re in the last stretch of the race when tax time rolls around. Most of the work will be easier if you plan ahead. Here’s what your Duluth, Georgia business needs to know about tax preparation.
It’s Never Too Early to Start Preparing
Never wait until the last minute to start preparing for tax time. Even if you’re a natural born procrastinator who thrives on sliding into the finish line at the last minute, it’s important to make sure your ducks are in a row when it comes to your taxes. Wait until the last minute on other things. Get ahead of the game and think about your taxes now. One thing that can help is outsourcing your accounting and bookkeeping, so you know your records are in great shape, updated and correctly filed for easy access.
Organization is the key to smooth tax preparation. This means ditching the shoebox full of receipts and having the right tools in place to help you manage all aspects of your company’s financial information, from investments to payroll, inventory to accounts payable. A good software program and a reliable bookkeeper will help you stay on top of all your data and information throughout the year, so you don’t have to do a last-minute scramble to gather financial records for tax time.
Understand Your Deductions
Before you start throwing deductions at your tax return, understand what you can and cannot legally take. According to the IRS, small businesses can deduct expenses that are “ordinary and necessary.” Keep in mind, what’s ordinary and necessary for one industry may not be for another. An accountant can help guide you on this, as they have a working knowledge of the latest tax codes and laws to make sure you stay on the up and up.
Unlike personal tax filing, small businesses must make quarterly estimated tax payments after the first year of business. Using last year’s taxes can help you accurately estimate how much your quarterly tax burden will be, to make sure you’re paying close to what’s due without overpaying and stretching your budget.
Don’t Be Late
Mark your calendar at the beginning of each year with your tax due dates. If you didn’t start in January, do it now. Like many of your most important meetings and appointments, you do not want to miss or be late for your tax deadlines. If you plan properly throughout the year and make sure you know when the due dates are, you can avoid large late penalties by getting your tax filing in on time.
Work With a Professional
You might be very good with numbers. You’re a business person, after all, so you must have some sense of how to manage your money. However, you also need to understand how to manage your time and the value of your expertise. The best place for you to focus your time and attention is on your business, not on your taxes.
If you are not an accountant, now is the time to hire one. Yes, you should be aware of everything going on with the finances of your business, but that doesn’t mean you should be the primary advisor to your own company when it comes to managing your financial information and preparing your taxes. Work with a professional to ensure you can focus on your business, and they can accurately and efficiently manage your tax preparation.
If your Duluth, Georgia small business isn’t ready for tax preparation season, now’s the time to get there. Click or call 678-990-0924 for a free consultation to learn how timely and professional tax preparation can help your business.