As a business owner, you have plenty of experience eating elephants. One bite at a time, you’ve taken down big, intimidating projects by breaking them into smaller, more digestible, pieces. But not all elephants are created equal; some are more likely to cause heartburn.
Tax season can test even those with the strongest of stomachs. Filing a return often feels complicated, tedious and overwhelming. The good news, though, is that the filing process is completely manageable. You may just need to take bites a little earlier (and more often).
The pluses of filing your business’s tax return early include less stress and, most importantly, more money. Any extra time you give yourself to prepare lessens the likelihood of inaccuracies appearing on your return, which means far fewer headaches down the road. The opportunity to include valuable deductions or credits within your filing offers some monetary perks as well.
So, when is the ideal time to begin? The best answer: right now. Tracking taxes should be a year-long practice, not a last-minute chore frantically performed in the days and weeks leading into the filing deadline. David Firsch of Firsch Financial Group, Inc. recommends businesses maintain an ongoing file devoted to taxes that categorizes both income and expenses. That way, when the time arrives to submit your return, all you have to do is print everything out.
Better yet, make it a recurring event. If you can carve an hour out of your schedule each week, devote it to keeping your financial records up to date. Not only will that practice help minimize any inaccuracies or mistakes that may appear on your business’s return, you’ll likely have enough time to make any needed corrections.
You’ll have the time to seek out expert help, too. It’s tough enough running a business without having to keep up with tax laws. Connecting with a tax professional like a CPA relieves you of that burden. Those specialists are knowledgeable on processes that may keep you from paying the IRS more than necessary. Their schedules tend to get a little busier as the filing deadline approaches. It’s a good idea to touch base sooner rather than later.
If these recommendations feel a little late for this year’s return, you’re likely still in good shape. There are several useful tools available to help you play catch-up. Online tax filing platforms like TurboTax and TaxSlayer offer affordable, user-friendly paths to preparing and then filing your return. Those resources typically elevate the accuracy of your tax information, which can help you avoid penalties and increase the amount of a potential refund.
Regardless of whether you’re 12 months or 12 weeks away from filing, making a list leads to tax season success. CPA Joseph L. Rosenburg recommends a making a checklist with items that include choosing an accounting basis, deciding on a depreciation method, tracking expenses and planning for any surprises, like self-employment taxes.
While some lists are longer than other, most business owners agree that tax season is lot to chew on. It’s important to start biting as soon as you can.