For many small businesses, tax season is the most dreaded time of the year. It can be both time-confusing and stressful, as there is little margin for error. Here are some tips to ensure you have an easier tax season, while also helping you to better plan for your financial year ahead.
- Use software to your advantage.
There are a variety of bookkeeping software applications available that can make it easier to track financials throughout the year and compile tax documents annually. “File This” is a digital filing cabinet where you can keep track of all documents and bills. “It’s Deductible” is an app that allows you to instantly access all fair-market prices for donated items, making deductions more efficient than ever. By relying on computer processes, rather than manual data entry, you’ll also eliminate the potential for human error, enabling you to create clean and accurate tax documents.
- Focus on saving money.
Perhaps the most dreaded part of tax season is actually having to pay your taxes. It can feel as though taxes cut into business profit considerably, but there are ways to reduce your overall payment. Ensure all potential deductions are meticulously tracked throughout the year, so no deduction is overlooked on tax day. To increase deductions, consider making some critical business purchases before the end of the year, such as stocking up on office supplies or investing in new business electronics. By making these necessary purchases in December rather than January, you’ll be able to deduct them from your taxes and save a bit of money.
- Taxes need to be a team effort.
If you’re thinking you can unload the entire tax burden onto your accountant, think again. In order for your tax season to run seamlessly, it needs to be a joint effort with members from every department completing their share of the work. Divide the workload, so each department is clear on their duties, and assign strict deadlines to ensure all tasks are completed efficiently.
- Plan for the year ahead.
If you truly want to simplify your tax process, you need to be implementing a year-round strategy to streamline bookkeeping and ensure meticulous records are kept. Right now is the ideal time to devise a bookkeeping strategy for the coming year. As you’re going through your tax processes, pay attention to any stressful factors and inefficiencies that can be improved upon in the coming year.
Were employees failing to report out-of-pocket business expenses efficiently? If so, perhaps it’s time to issue business credit cards to employees. Are you dealing with a lot of endless paper trails that make compiling financial data tedious? Perhaps it’s time to switch to an entirely electronic payment system. By identifying the key factors that are limiting your bookkeeping efficiency, you can strategize ways to improve upon your processes in the coming year.
Tax season is the bane of all businesses, but it needn’t be as stressful as you make it. Provided your business remains organized throughout the year, your team should be able to conquer your business taxes quickly and easily. To ensure you save the most money on your taxes, you need to thoroughly account for all deductible expenses. Stock up on everything you need for the office today, so you can deduct one more expense from your annual taxes. Click here to start shopping.