Tax season is just around the corner. As a business owner, you are not alone if you are facing a number of questions and doubts about how to handle your business’ tax filing. Should you do them yourself? Should you hire a professional? Are you going to be audited? Whether or not you decide to hire a professional or do your taxes yourself, it is extremely important to make sure you are up to date with all the relevant knowledge about taxes and how you can avoid any tax season nightmares.
Step 1: Organize your records
If you haven’t already, now is the time to start sorting through all your expense documents. This can be a daunting task in and of itself, and using an expense management system to keep track of all your expenses throughout the year is a great first step in getting tax season ready. Start getting all your receipts together and ordering duplicates if you are missing any.
Online or cloud-based bookkeeping also saves a number of business owners from drowning in papers. If paper receipts clutter your workspace, it may be a good idea to consider storing them online using apps like Shoeboxed, Neat or Evernote. It is important to have all your receipts and records from last year together in case of an audit.
Step 2: Be aware of important deadlines
Tax deadlines have a way of sneaking up much faster than you would expect. We’ve all been there. Make sure you know the important deadlines in advance so you don’t miss anything important, and avoid facing expensive and unnecessary fees.
Add these dates to your calendar:
January 15: This is when estimated taxes on income are due. You need to assess and determine your tax liability and pre-pay the government by the 15th, then they will file your taxes.
February 2: If you paid an independent contractor or an employee more than $600.00 in 2014 you will want to provide them with a W2 or 1099 on or before Feb. 2nd.
March 16: If you want your business to be treated as an S Corporation beginning with calendar year 2015, you need to file Form 2553 with the IRS by March 16.
April 15: Individual tax returns for 2014 are due. If you prefer to request an extension until October 15, your request must be in by April 15
Mashable created a great list of all the 2015 tax deadlines: Check it out!
Step 3: Get your bookkeeping up to date
In order to file your taxes, you need to make sure all of your bookkeeping is 100% up to date. Your books are your savior when it comes to an audit. Current books give the most accurate view of your business’s income and expenses.
The reason it is so important to keep your books up to date is because incorrect information can cause you to file an incorrect tax return. Suffice to say, that’s something you want to avoid.
Step 4: Document all tax deductions
It is especially important to make sure that your personal and your business expenses stay separated. It may be a good idea to check your personal bank accounts for any business expenses. Take note of when you used a personal check or a personal credit card for business expenses.
Make sure to check for any changes in the deduction rules. The deduction rates fluctuate year to year. If your business is new, you will especially want to see if any of your expenses fall under start-up costs.
Step 5: Hire a professional
Tax rules are complicated and constantly evolving, and let’s be honest, you’ve got a business to run. By hiring a trained professional, you can not only free up valuable time, but also ensure that you will have someone whose job it is to know the ins and out of compliance and to accept liability.
Ask your accountant these questions:
Are there any tax credits available for my business locally?
Is there nexus for my business in any other states? Have I dealt with sales tax properly?
Could I benefit from changing my business structure?
Should I be making any charitable contributions?
Step 6: Start planning for next year
“Prior planning, prevents poor performance.” These are words to live by when it comes to coming out of tax season successfully and with as little stress as possible. Plan ahead and keep up with organization and bookkeeping as you go. This will save you a lot of time when tax season rolls around next year.
The talech approach
Knowing how much planning goes into complicated tax preparation, we’ve continually evolved the talech solution to streamline this effort for our customers. Since the talech system is cloud based, customers always have access to digital records of their sales, tax and receipt data in real time.
We also provide a seamless way to integrate your point-of-sale data into your accounting software, offering a plugin for QuickBooks desktop which syncs all sales data.
Lastly, we know how important it is to stay updated on your liabilities by tax agency. For instance, in many states, alcohol sales are taxed differently from food sales. With talech, you can create different tax types, each with its own tax rate, and we give you a breakdown of your taxable revenue and tax collected by tax type.
Want to weigh in? Tweet us at @mytalech and let us know what’s on your short list of must-have tax season advice.