Avoiding These 3 Classic Tax Preparation Mistakes
If you’re like most small business owners, as the end of the year approaches, you begin to focus on tax preparation. Side effects of this season often include anxiety and feverish activity, but it doesn’t have to be like that. Here are some tips to help you avoid some of the biggest tax preparation blunders.
Organize Your Material
Organization is the key to efficient tax preparation, but one of the biggest mistakes small business owners make is storing material haphazardly until the end of the year. Instead, scan all receipts and other financial items as you receive them, and keep these records in clearly labeled digital archives. Consider acquiring quality accounting software to assist you with these details.
Go Over Your Data
Don’t make the mistake of having to play catch-up because you fall behind on important financial paperwork and transactions. For instance, keep up with your quarterly estimated tax payments, and near the end of the year, carefully check the payments you have made, and compare them with your overall annual numbers. Reconcile your bank transactions with your accounting system entries every week so that you don’t get caught with an overwhelming, time-consuming task at tax time. Double-check that you have issued W9 forms to any contract labor you have used during the year to expedite the issuance of 1099 forms during tax season.
Reserve Time With Your Accountant
Another tax preparation blunder that small business owners commonly make is assuming that their accountants will be free to spend one-on-one time with them during tax season. No one is busier at the end of the year than an accountant, and reputable accountants handle taxes and other annual financial wrap-ups for numerous clients. Be sure that you can obtain the tax preparation assistance you need by booking time with your accountant early.
For more advice on small business tax preparation, get in touch with AMZA Capital.