It’s that time again! The tax season is here and if you’re feeling anxious about getting everything you need for your business, we have some tips to help you navigate the process. The key is to create an organized strategy to make sure it goes as smoothly as possible. As a trusted CPA firm in VT, we are happy to guide you through the tax season process and assist you with all your accounting needs.
Know Your Business Type
The first thing you need to understand is your business structure and the obligations that are associated with it. Are you a sole proprietor, partnership, corporation, or nonprofit organization? Each one is different and has specific tax requirements, including income tax, self-employment tax, and state and local taxes.
Keep Your Personal and Business Finances Separate
Mixing your personal and business finances causes gray areas and can lead to complications when you file your taxes. If you haven’t yet, open a checking account exclusively for your business. This will make it easier to provide documentation at tax time.
Keep Detailed Business Records
Keep and maintain detailed records of all your business income and expenses. Recording each and every business transaction in a general ledger, categorizing each transaction accurately and consistently. Everything from receipts for office-related equipment and supplies, invoices from services provided, business credit card statements, payroll records, and other documentation.
Consider Your Eligible Credits and Deductions
Tax rules and laws change all the time. Tax deductions and credits can reduce your taxes, but many times are left off tax paperwork because a business owner is not familiar with them. They range from travel expenses to education costs to office equipment, supplies, and charitable donations. A professional CPA can help you find beneficial deductions.
Keep Bank Accounts Reconciled
Humans make mistakes and there are checks and balances to correct them in the business world. The word reconcile is an accounting term that means you need to make sure your business books match your bank records to avoid errors, fraud, and other issues.
Stay Up-to-Date On Tax Laws
Just like eligible credits and deductions, tax laws are complex and also change from year to year. Stay informed and up to date about these changes that can affect your bottom line. You can either frequently visit the IRS website or consult a professional CPA like your friends at Clear Accounting who keep up with these constant changes.
Calculate Tax Payments To Your Budget
Chances are your business will have to pay taxes. It’s important to plan for payments to avoid interest or penalties. Payments are usually calculated and need to be paid every quarter, making it easier to fit into your budget.
Deal With Tax Documentation Proactively
Start early when preparing for tax time. Don’t wait until the last minute to find and organize your tax documents. Keep everything organized and filed together in one cabinet or box. A proactive approach will help you file your taxes accurately and completely. It’s also helpful if you are ever audited.
Contact Clear Accounting For Professional Tax Preparation
Stay calm and focused. The tax season can be stressful, but by taking a proactive and strategic approach, you will get through it successfully. Contact Clear Accounting, a full-service accounting firm serving New Hampshire for professional and accurate tax preparation and all your accounting needs. We provide valuable insights that empower you to make informed financial decisions. Let us take bookkeeping and accounting off your plate, so you can focus on building your business. Contact us and book your consultation today!