This tax season will undoubtedly be difficult if you are one of the many small business owners who neglected your bookkeeping throughout the year. You will be hurriedly gathering all of your receipts and business costs to account for all you did in the previous year.
This tax season will undoubtedly be difficult if you are one of the many small business owners who neglected to keep track of your books throughout the year. You will be in a rush to gather all your receipts and business costs to make sense of everything you did throughout the year.
Here is a helpful checklist of the top four things you should complete before giving your accountant your books to assist you in getting through this time:
1. Collect All Fiscal Records
Gather all of your receipts, bank statements, canceled checks, and transaction records for your purchases, business expenses, revenue, and transactions. You must acquire all the documentation from small business owners who frequently charge some expenses (such as those for a home office) on their use of personal credit cards to ensure all business expenses are recorded.
2. File for An Extension
Do not wait to file a tax return before asking for an extension. Remember to estimate any future taxes owing and send that together with your request for an extension. You need not be concerned if you believe you have already paid the necessary taxes. However, you must pay the amount owed to avoid penalties and interest when you ultimately pay your taxes, especially if your income has grown over the year or your expenses are lower than planned.
3. Sort All Financial Documents and Categorize Them
After you have compiled your financial records, sort and place each business expense into distinct categories, such as auto expenses, home office expenses, utilities, medical expenses, office supplies, and charitable contributions, this makes it simple for your accountant to get the appropriate data, input it into a spreadsheet or accounting program, and perform calculations to determine any deductions you may be qualified for.
4. Document All Income
Small business entrepreneurs might mess up when tracking their money. To avoid being in the same predicament again the following year, sit down after turning over the “books” to your accountant and try to come up with a better approach to manage your financial records, not just during the fiscal year but all year long. The IRS will pursue you if you fail to disclose your revenue properly, even if you fail to submit all your company costs.
If you want to avoid being in this predicament again the following year, sit down once Tax Day is finally behind you, and you have filed your return and try to come up with a better strategy to keep your financial records overall rather than just during tax season.
5. Hire A Bookkeeper
When will you find time to record a month’s or a year’s worth of records if you don’t have time to do a little bookkeeping every day? Different individuals have various systems. Whether you utilize a professional bookkeeper or do it yourself, the most important thing is that you have a system in place and follow it every day.
Maintaining company books is an important aspect to which each business owner must adhere. However, there are times when managing all the business verticals becomes difficult. Outsourcing your accounting and bookkeeping tasks to third-party companies like Profit Jets would be a great way to ensure work perfection and compliance with regulatory norms.
We at Profit Jets have an expert team of accountants with years of experience managing the company’s work with the highest precision. Connect with us today to discuss your requirements, and let us give you a rate quote for the same. We assure you that you will get the best quality work at an affordable rate.
Call us today, and let us assist you with all kinds of accounting and bookkeeping work.