Tax season 2019 is finally wrapping up. For some, you filed that return months ago and are well into managing your business for this year. For others, you may still be fielding questions from your accountant and anxiously searching records.
If the thought of doing taxes for your business makes your head pound and your palms sweat, know that it doesn’t have to be this way. The best way to make next year’s tax time run more smoothly is to start planning now.
Here are three tips you can follow to avoid a headache next tax season.
Maintain accurate books throughout the year
Neglecting your business’ bookkeeping is not only a poor business practice, but also a huge pain come tax time. You should be maintaining accurate books by reconciling your business’ accounts regularly to balance purchases, sales, receipts and payments.
Going through receipts and other records more than a year later means important information is often forgotten. For every forgotten expense, you could be leaving money on the table for your deductions.
Additionally, accurate bookkeeping aids you in making better business decisions. Having a complete financial picture helps you better understand your profits, losses and potential for growth.
If bookkeeping is such a dreadful task that you’re avoiding it completely, consider hiring a professional bookkeeper to keep your records in good shape.
Create a system for tracking receipts
When doing your taxes this year, did you find yourself racking your brain trying to remember expenses you could write off? Was there a deduction you thought you qualified for, but couldn’t prove why? A well-organized system for tracking receipts and invoices will save you a lot of searching.
There are many digital solutions to help keep your receipts organized and out of the shoebox. By uploading pictures of your receipts to a cloud-based app, you can easily pull up receipts from anywhere, tag receipts by type and share information with key team members.
Electronic receipts are especially helpful in case of an audit. Pictures don’t fade, so you won’t have to worry about a receipt being indecipherable. Your electronic receipts plus your clean books will help an audit go more smoothly.
Meet with your accountant before year-end
If you were avoiding your business’ finances and dreading tax time, your CPA can help soothe your fears. Meeting with your CPA ahead of tax season can help you get a clearer picture of what to expect when it’s time to file.
By meeting with your CPA at year-end, you can develop a plan together for tackling tax time. Your CPA can give you an idea of how much you’ll owe, so you’ll have a few months to prepare. She can also highlight any potential deductions so you can pull up receipts (already neatly organized in your new system) and determine whether you qualify.
Whether you’re looking for a bookkeeping professional to keep you organized year-round, or a tax professional to help you prepare for next year, we’re here to help. Contact us at MCG Solutions today to get started.