Most of the business owners devote their time and effort in increasing their sales and improving their business operation. There’s no need to worry when everything is going well; when the business is earning more than what is expected until tax season comes and then suddenly everybody gets into a panic mode. If these things happened to you, you’re not alone.
Tax preparation is one of the struggles of most business owners. To avoid tax penalties and issues with the IRS, taxes should be calculated accurately, filed properly and must be paid on time. But with all the tax laws, regulations and constant updates, it can be daunting, frustrating and time-consuming. If you want to get more organized, save time and make the process easier, these bookkeeping tips for tax preparation are what you need.
Prepare a Checklist
Several documents are required to prepare taxes. This may include bank statements, credit card statements, accounting records, payroll reports and many more. Imagine if you only gather these necessary documents while you’re in the middle of your tax preparation, this can be a huge mess. You may probably overlook something which may result in serious problems.
Therefore, it is wise to prepare a bookkeeping tax preparation checklist to cover everything. You’ll be surprised at how much time you will be able to save by organizing your information beforehand. Make also a list of tax deadlines to make sure that you file all your tax returns and pay them on time. This is a useful reminder and something that every taxpayer must do.
Sort and Categorize all Expenses
After gathering all necessary receipts and documents, sort each business expenses based on their respective categories. For example, automobile expenses, office supplies, utilities, medical expenses, and others.
Since different types of expenses are eligible for tax deductions, grouping them will make it much easier to calculate and claim these deductions. But be sure that the financial record is accurate because making mistakes can be very costly. It is best to hire a professional to take care of that matter.
Store Receipts and Expense Documents Digitally
If you are to ask right now to provide all your business expense receipts, will you be able to provide all of it? Keeping a hard copy of your business’ receipts and documents is a must but it is also highly recommended that you must create a digital copy as soon as possible. Whether you are using bookkeeping software or manually scanning them, this step is very important. Digitally stored receipts are accessible, easily searchable, stored securely and you can print as many copies as required when the time of filing comes.
Hire a Tax Professional
Tax preparation is not something that you have to face alone and is oftentimes best handled by a tax professional. If you want to save time, money and have peace of mind, you might want to consider hiring a tax professional who will help you get everything done.
Always keep in mind these bookkeeping tips for tax preparation. It will be useful to get you ready for filing. If you’re looking for someone who can help you with your tax preparation, FAS Bookkeeping and Tax Services offer professional services with dedication and passion to valuable business owners like you. Let our Enrolled Agent handle your tax preparation and contribute to your business success. Let us know your concerns! Contact us today at email@example.com or 832-437-0385.