Year-End Tax Prep Strategies for Small Businesses
Many small business owners fear one time of year more than any other. That time, of course, is the time to prepare their year-end taxes. While taxes are stressful for anybody, small business taxes, can be especially challenging.
If you find yourself scrambling every year to get your business bookkeeping ready for year-end tax preparations, you need start now to develop strategies that can help you better prepare ahead of time! Learn some of the most effective small business tax prep strategies that you can put to use in your business practices so that you can get started making the adjustments you need to make as soon as possible.
Make Sure Your Bookkeeping Is Current Year-Round
One of the most important things you can do to ensure that you are ready for the year-end tax process is to maintain your records and bookkeeping all year-round. You want to be sure that you take advantage of all tax deductions allowed to your business. If you have expenses that have not yet been added to your books or daily receipts that have piled up to be entered at a later time, now is the time for you and/or your bookkeeper to tackle them.
Keeping up with your bookkeeping and your reports throughout the year is very important. However, as your business enters the final quarter of the year, it is even more important to do any catching up in your bookkeeping that needs to be done for your business tax prep.
If You Are Pressed For Time, Hire A Consultant To Help
It is quite understandable that as a small business owner you may find yourself busy and overwhelmed. If this is the case with you and your business, it’s a good idea to hire a consultant to help clean up your books, especially if they are not accurate or current. They can also provide useful management reports, budget for the new year, a
nd business advise. This extra helping hand can make things easier for both you and your accountant when it comes time to do your taxes.
Make Sure To Separate Business and Personal Expenses
When you run a small business, one of the easiest mistakes that you can make is to co-mingle your business and personal expenses. In the first few years of business especially, the majority of your business expenses will be paid by your own personal funds that you put into your business. Because of this, you have to be especially attentive to separating your business and personal expenses. The fourth quarter of the year is a good time to check through your records and separate your business and personal expenses.
Invest in New Bookkeeping Technology and Apps
While standard paper records and books were once the standard of doing business and keeping accounting records, today is quite a bit different. There are many types of accounting software and apps that you can use to keep your books and records. Apps for tablets and smart phones can log expenses and income as you go – track bank accounts, expense receipts, create invoices, mileage and much more. Choose an app that offers a free trial so that you can be sure you are using the right app for all of your small business bookkeeping needs.
Now that you know a few of the basic steps that you can take to prepare for your small business year-end taxes ahead of time, you can get started as soon as possible.