Taxes are something that most business owners dread, but it doesn’t have to be that way. There are systems you can put in place that will help you prepare for each quarter before it comes.
Tricia Sciortino, BELAY CEO, and Lisa Zeeveld, BELAY CFO, recently discussed on our podcast, One Next Step, how a bookkeeper can help you prepare for tax season.
Here’s a summary of that resource.
1. Hire help.
This person could either be an accountant or a bookkeeper.
An accountant will give you advice on how to grow your business, properly plan for taxes, and what documentation is important. A bookkeeper will help you keep crystal-clear books making implementing that tax plan a breeze.
A bookkeeper will also help you identify good processes and provide visibility into your finances.
2. Keep adequate records.
Avoid leaving deductions on the table or requesting an extension. Keeping adequate records throughout the year will save you time and undue stress.
3. Separate business from personal expenses.
Do you have a clear line between business and personal expenses?
It’s easy to overlap the two, but keeping your personal and business expenses separate will also simplify your tax prep.
4. Manage payroll.
A bookkeeper can process and execute payroll each month to ensure employees are paid consistently and without delay, while also ensuring your accountant has everything to keep your payroll taxes on track.
5. Create a tax plan and work it through the year — not just during tax season.
Ensuring your bookkeeping is up-to-date will help your accountant make your quarterly tax payments with ease.
According to the U.S. Small Business Administration, one way to be set up for success is to regularly set aside money so that you ensure you’re covered when quarterly taxes are due.
Download Form 1040-ES from the IRS to calculate your estimated taxes so you make sure you are setting aside enough each month.
You should also be maintaining electronic and paper files that keep a record of your profits, losses and expenses. It’s easier to track as you go instead of scrambling at the last minute to gather everything – and maybe miss something.
Have a location where you document and save copies of receipts, invoices, bills, expenses and mileage, and update that each time there is a change. The key is organization. If you maintain order, your quarterly taxes should be a breeze. Add the due dates to your calendar, have your documents ready, budget accordingly, and you're set.
Once you have a clear idea of the state of your business finances, it’s time to dive a bit deeper.
TurboTax has a great resource that includes due dates on estimated taxes, how to’s and details on who pays what and why.
And if all of this sounds like too much to add to your plate, we have good news! Our Bookkeepers can take that burden from you and file your business taxes.
Learn more about their tax filing services along with every other way they can help, and become less stressed today!