As tax season draws closer, many small business owners will start fretting about stuffs like receipts and records. It’s a season that many business owners dread because of the stress involved in sorting out tax documents. There’s always work to do even for those businesses that outsource their tax preparation. Financial statements and records are things that a business owner still has to prepare.
Every year, businessmen resolve to be more careful with their paperwork but fail to do so. Even the most organized and responsible businessmen often fall short of having their financial documents accurate and ready for tax season. It doesn’t have to be that way, you can make tax season bearable for your business by following these tips:
- Prepare in advance
It’s always better to begin a huge task early enough rather than when it’s close to the deadline. Don’t wait till it’s tax season before you review your receipts or financial records and tally your expenses. All through the year, closely track your business expenses and save them on your accounting system as soon as possible. In other words, have a good record of the expenses you make on stuffs like entertainment, meals or gas mileage. Better yet, you can make notes about the expenses and why your business had to spend money on that. Besides being more accurate, keeping hourly or daily record is much easier and will save you a lot of time. Fortunately, there are now many apps you can use to make preparing more efficient and easier.
- Use a board-certified accountant
Filing business taxes and navigating a bunch of paperwork is a nightmarish experience you can avoid with the help of a good CPA. Look for one that you will enjoy working it and that’s experienced in dealing with tax situations that are similar to yours. The cost of hiring an accountant won’t break your bank but if you’d rather do your own taxes, have an expert go through your work before you fie. A pro will either suggest deductions that you might have to take or make corrections for you. Try not to procrastinate, have more frequent meetings with your accountant.
- Avoid ghost assets
Ghost assets are assets that are rendered unusable or physically missing and so, cannot be accounted for. They however, can greatly affect the tax return and bottom-line of your company. Surprising enough, a lot of business owners are ignorant about ghost assets or the impact they have on their taxes. Luckily, asset management systems have made it easy to do away with ghost assets
- Asses your potential deductions
Yes! You can also use tax rules to your advantage. You can profit from your potential tax deductions, it’s not all about giving the government its dues. Hire an accountant who has a good understanding of what your business is all about and can assess your potential deductions in the best possible way.
- Host a party to celebrate tax return completion
Hosting a party to celebrate the fact that you’re finally done can be a great motivation. You will want to always finish on time because of the fun that comes along with it.
Taking steps to be adequately prepared for the tax season is a wise decision that a smart businessman will take. Just as smart businessmen know how wise it is to keep their businesses insured. The concept of professional indemnity insurance is something that astute chartered surveyors, accountants and consultants know never to take lightly.