Whether it’s the middle of summer or end of winter, every business should be ready for tax season. Don’t save your tax preparation for December or January. Here are five tips for tax preparation that you can do today to be ready for next tax season.
Meet with your bookkeeper
Even if your bookkeeper doesn’t do your taxes, the work he or she does make tax preparation easier. You should be familiar and comfortable with your books and reports. Check to make sure accounts are being reconciled. Review your balance sheet and P&L report. Know your cash flow.
Keep your mileage log updated
If you use your personal vehicle for work purposes, you’ll want to make sure you can deduct the maximum amount on your tax return. Fortunately, tracking mileage on a paper log is no longer standard. Many apps for your phone automatically track trips for you. All you have to do is mark which ones are business and which are personal.
Keep an expense log
Track receipts to ensure you’re maximizing deductions. If you haven’t separated your personal and business finances, create an account that you use for business purchases. Save receipts. Some software lets you photograph receipts and upload to your accounting software. Review your personal account for business activity and make sure to save those receipts.
Keep your bank statements accessible
Even if your bank doesn’t mail statements any more, you should have a folder on your computer where you can save each statement for the year to make it easier to gather them together at tax season.
Schedule tax preparation time with your tax preparer
Talk to your tax preparer in November or December to get a list of what they need to prepare your taxes. Make an appointment for January. This gets you on the schedule, making you motivated to get everything ready in time. By getting your business taxes done early, you’ll be able to file your personal taxes, too.
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