Tax Prep Checklist for Small Businesses
When tax time rolls around, it often catches many business owners off guard and results in countless stress-filled hours as they attempt to pull everything together. However, if you take a few simple steps throughout the year, when tax time rolls around you will be prepared for stress-free filing.
Put Important Dates in the Calendar
The first thing a small business owner can do to help get ready for tax time is to make sure that all important dates are in their calendar. This will help make sure that nothing is missed or overlooked, and you can plan for things in advance so you aren’t rushing around at the last minute. The last minute rush is one of best ways to guarantee costly mistakes.
Keep Basic Information On Hand and Updated
The next thing a small business owner should do to be ready for tax time is keep basic information such as the business name, address, telephone and fax numbers, and social security numbers on hand and updated. Be sure to check and update this information once a quarter and you will save valuable time when tax season rolls around.
Keep Proper Expense Documentation
Next, you want to make sure that you are keeping proper expense documentation. There are several expenses that can be claimed when you file your returns, such as business related meals and entertainment, accountant and lawyer fees, and office supplies, but only if you have the right documents. Make sure that you have the necessary receipts and that you file them away safely so they are ready for tax time.
Keep Records and Financial Statements Organized and Accessible
One of the biggest mistakes small business make is keeping poor financial records. There are several software packages available that can help you keep good financial records, or you can hire a bookkeeper to help you manage your financial records. Regardless of how you choose to keep your records, it is important that they are maintained and updated regularly to reflect what is going on financially in your business. Keeping these records will help you immensely when tax time rolls around.
Properly Document Your Deductions
There are two big deductions that small business owners like to claim, their home office and their vehicle. By keeping proper documents on the deductions you wish to claim, you will be able to get the most out of them when you file your taxes.
Keep Track of Your Assets
Finally, you want to make sure that you are keeping proper documentation of your assets. It is vital to keep track of what things are being purchased or sold during the course of the tax year because these documents will be needed to complete your tax return.
Filing taxes can be a lot of work, however, if you take the time to keep and maintain proper documentation, the whole process will be faster and easier. If you are behind on keeping your financial records, take some time to get them in order. Help make your taxes less stressful.