For many people, tax season can be a mad scramble full of document-hunting, form-filling, nail-biting and yelling. But it does not have to be. Starting your tax prep well before the deadline can make your life way less chaotic—especially if you own a business and plan to claim deductions.
In order to be well-prepared for the next tax season, it is essential to have good transactional data. To achieve this your books must be in order! Follow our guide to getting your business ready for tax season:
Make Sure All Transactions Are Recorded Properly
Messing up your taxes because of missing or erroneous transactions can be stressful, but it can be easily avoided. Make sure you are recording all of your business transactions in your general ledger, and that you are categorizing each transaction as accurately and consistently as you can. This will help you maximize your deductions. For example, if you recorded your website hosting under "Advertising" one month, do not record it as "Investment" the next month. Make sure you are consistent.
Know Your Numbers
Knowing your numbers will help you understand your financial position, this includes your expenses, profit, revenue, net profit margin, cash flow, etc. It will better prepare you for tax planning and strategize for some tax-saving opportunities that way you are not caught off guard and have to pay the IRS an arm and a leg.
Reconcile Your Bank & Credit Card Accounts
"Reconciling" is just a complicated word for "make sure your books match your bank accounts". Your bookkeeping is incomplete until you have checked it against all of your statements. By reconciling you can save yourself the trouble when it comes time to filing your taxes.
Hiring The Right Accounting Professional
Doing everything yourself can be a great way to save money, but we strongly advise that you have an experienced accountant to take a look at your books. Don't just hire a professional for the sake of hiring them. Make sure that the person you hire knows what they are talking about. The right accountant will make sure you are set up properly, that you are taking advantage of the right year-end tax moves, and that your business is in good shape for tax season.
Let OneSelfClub get your books tax-ready! Sign up today and skip the stress and chaos and let us handle your bookkeeping for you.