Running a business brings its share of joys and challenges. Tax time can really bring those challenges to the forefront if you aren’t prepared. Follow these 5 tips to make sure you are ready to meet any IRS requirements and deadlines that are ahead.
1. Stay Organized
It is often easier said than done, but staying organized is the key to a less stressful tax season. Keep everything clearly labeled and in an easy to access location so you can refer to it while you complete paperwork. You might also want to look into electronic organizers that reduce the amount of actual paper you need to keep tabs on. Changes to the tax code can affect businesses, so you’ll also want to stay on top of those.
2. Document Expenses
Keep careful records of all business expenses. That means saving receipts, whether they are paper or electronic. Keeping business and personal expenses separate can make this much easier and help you avoid trouble if you need to provide documentation later on.
3. Use Deductions Carefully
If you have a large number of charitable contributions or expenses that you are planning to deduct, your return may raise some red flags at the IRS. That is especially true if they seem out of line with your income. If you are unsure about allowable deductions, it makes sense to consult with a UCPAA accountant to get clarification.
4. Issue W-2s and 1099 Forms
Almost all businesses will need to issue the required W2 and 1099 forms by the end of January. Check with the IRS tax calendars for exact reporting, payment, and filing dates that your business must adhere to.
5. Start Planning for Next Year
Even though you aren’t through this year’s filing season and return, it is still a good idea to start looking toward your current year obligations. Now is a great time to start planning for organization systems and expense tracking to help streamline the process going forward.
It’s never too early to prepare for tax season. Staying on top of changes to the tax codes, keeping accurate records, and developing a system to keep it all organized can help you get through a filing with less stress.