While tax season can be hectic for some people, it doesn’t always have to be. We have a comprehensive guide to help business owners prepare for tax season.
Step 1: Organize Your Financial Records
Gather all financial documents, including income statements, expense records, receipts, invoices, and bank statements. A lot of errors are made because files weren’t organized or someone misplaced a record. Be sure to make sure all of your transactions are categorized properly. Be sure to make sure your books are balanced, if you can’t do this yourself be sure to talk to a tax professional.
Step 2: Understand Tax Deadlines
Be sure to familiarize yourself with the tax filing deadlines for your business ahead of time. Note key dates for estimated tax payments and other relevant forms.
Step 3: Be Sure to Set Aside Enough Tax Money
Use the 30% rule. This means that if you are unsure of how much you owe in federal taxes, set aside at least 30%. This is so that you have enough to set aside for your tax obligations. You can choose a variety of saving methods. They could be per payment, monthly, or yearly. Another great way to set aside money is to keep your tax money in a separate account.
Step 4: Stay Compliant on Tax Laws
Be sure to stay updated on changes in tax laws and regulations that impact your business. Make sure you and your business are complying with federal, state, and local tax requirements.
Step 5: Talk to a Tax Professional
If you need help planning ahead, be sure to talk to a tax professional!
