Getting your small business ready for tax season can be stressful for some, filled with document hunting and endless forms that need to be filled out. Giving you a head start to prepare your small business taxes well before the deadline can make the process feel a lot smoother.
Bookkeeping can be a task that takes up a large chunk of small businesses time, but it’s the first step to filing your taxes. There are four action items you need to take to ensure you’re following the right strategy for a hassle-free year when it comes to your bookkeeping and filing your taxes.
1) Ensure Your Books Are Balanced
Keeping your books balanced is an important step, especially if you are using double-entry accounting.
2) Match your Bank Records
You will need to ensure that your books match your bank records. Reconciling your bank accounts can be one of the biggest time savers for your bookkeeper and you.
3) Identify & Separate Business Expenses
Throughout your list of expenses, you will need to identify and separate your business expenses from your personal expenses. It’s recommended to separate your costs as they occur, or monthly, instead of sorting through expenses last minute. If it is left to the last minute, it may be likely that you miss opportunities for deductions and have spent more time than needed sorting through expenses as a result. If you haven’t already done so, opening a small business bank account can be of great help to keep your expenses separate.
4) Review with a Professional
It is always recommended to have a tax professional or an AG Bookkeeping Services to review your books for you to ensure that all the details are accurate and no opportunity has been overlooked, which can put your business in a better position. By implementing an up-to-date bookkeeping routine earlier in the year, your business can benefit by gaining an accurate snapshot of how healthy your business is operating monthly. This also leaves your small business in a better position to utilize different tax strategies recommended by a tax professional, while requiring less time, and stress, during tax season.