As the end of the year is slowly creeping up and business slows as people start hiding from the cooler weather, now is the perfect time to get your company ready for tax season. It’s not the sexiest subject, but tax season is a hard reality for all business owners.
Tax season doesn’t have to be so bad if you can find the time ahead of next spring to get your finances and documents in order before the New Year hits and business speeds up again. Making this time as easy on you as possible will ensure you take the time you need to do things right and make the most of your return, all while doing it stress-free.
Get your expenses in order today
Waiting to balance the books is only going to make things worse and unbearable. Start by looking at your expenses and making sure everything is tracked properly. This way, if you notice something is missing or just not adding up, you have plenty of time to track down a receipt or call vendors for the extra info.
Hopefully, you’ve been tracking all of your business expenses (such as gas mileage, utilities, meals, even cleaning supplies), so pull everything together and organize it nicely. Make sure you spend the time to file everything away neatly too, just in case you get audited. I use a program called Freshbooks! There are lots of others to check out as well.
Have your inventory in order
If you’re a business that sells products, make sure your entire inventory is tracked and up to date. You should have a dollar amount once you’re done, including a beginning amount and an end amount. Track what you’ve purchased for inventory and what you’ve removed for personal purposes. Also, note what you’ve spent on materials and supplies for your products.
If this is too much to do by hand, consider an app or software to automate this process for next year.
Know your deductions and requirements
Taxes are serious business, and you want to pay only what you need to pay while also ensuring that you’re making the right deductions for your business to get money back. You don’t want to get penalized for missing something you had to pay; conversely, you don’t want to miss out on some extra cash in your pocket simply because you didn’t know what you could deduct.
Do some research online or ask a tax consultant for more information. Even ask other business owners you trust and respect for advice.
Outsource if it’s too much (I have someone for you if you're interested. Message me for their info)
For some businesses, DIY is great. For many people, they get overwhelmed and hand it over to the pros. As you go through the process of preparing for tax season, you’ll start to see if you think it’s something to take on or not. Hiring a Bookkeeper is more affordable than you think. They will be able to find things you can't and point out any red flags. They can help you cross reference your receipts with your bank statements and even invoice your clients for you. It's worth every cent!
If you’re feeling overwhelmed or stressed, there is absolutely no harm in hiring someone and paying a bit of money to do it for you. Know when you’re out of your element and hire someone to help. Your business will only benefit from having a pro do the work if you don’t feel like it’s something you want to manage.
The best way to tackle the tough stuff is head on, and by being prepared you can problem solve now to save a ton of stress during tax season crunch time.