5 Tips to prepare for the Tax Season
Tax season can be extremely stressful if you are not adequately prepared.
We are now in the tax season, and you want to ensure the financial records are accurate, and you are able to utilize all the tax deductions.
It is important to make sure that your bookkeeping is not only done, but as efficiently and professionally as possible.
Bookkeeping is not only about recording transactions but ensuring that all business activities are recorded and classified according to accounting standards and tax laws.
The following are five (5) useful tips that can get you on the right path with keeping accurate books.
Accounting Systems
There are several different accounting systems that fit each business structure or needs. Some are simple to implement and user-friendly, while others can be more complex and take more time to understand and implement.
It is important to use the system that best suits your business needs. There are specific systems for LLCs that differ from those for Sole-proprietorship or even Non-profit. There are accrual-based systems and cash-based and there are systems that provide both and you can choose the method of accounting.
Organizing Documents
It is very important that your supporting documents such as receipts, invoices, contracts, etc are systemically organized and safely kept. It is recommended that these documents are kept for at least 7 years for audit purposes or other queries by stakeholders such as IRS, investors financial institutions, etc.
Professional Bookkeeper or Accountant
A Bookkeeper or Accountant is a significant contributor to your business success. It is often said, “Behind every successful business there is an Accountant/Bookkeeper”.
He/She will guide you in the right direction on your financial journey and will solve your problems relating to the financial aspects of your business. This will put your mind at ease and reduce the level of stress.
Tax Preparer
It is important to retain a tax preparer if different from your accountant or bookkeeper ahead of time, so you are able to gather all the necessary documentation to file your taxes in a timely manner.
Employee or Contractor
If you have employees, you will need to send W2 forms by January 31st. This will show the total wages throughout the year.
For contractors who are paid at least $600 for the year, a 1099 form is required to be sent to them by January 31st. It shows all payments that have been made to the contractor during the year.
Let's get in touch
Reach out to Jengar Bookkeeping Solutions if you need help implementing any of the tips mentioned above, or any other bookkeeping, accounting, or tax filing needs for your business.
We are your one-stop shop…