The time has come… It’s time to file your taxes. Whether you expect to write Uncle Sam a hefty check or look forward to receiving your tax return, here are some best business practices to follow so that tax season isn’t so, well, taxing.
1. Keep Good Files
You need one central location for all tax-related documents so that when it is time to file your taxes, you aren’t spending hours scraping together receipts and documentations. Create an email folder so you can just drag and drop email receipts for online purchases, charitable donations, etc. You should also keep a hard copy folder in your filing cabinet at home or at the office for items such as dry clean receipts and un-reimbursed business-related expenses, like client entertainment or travel expenses. If you didn’t do this last year, now is a great time to start for this year.
2. Know your Deductions
Your situation may entitle you to various tax deductions or credits. Home office space, charitable contributions, healthcare premiums, educator expenses, energy saving home improvement expenses, childcare, rental property expenses, and vehicle expenses if related to business are all possible deductions, if you qualify.
3. Set Money Aside
If you paid less tax throughout the year than you owe for your income level, expect to send the IRS a check. But you can make that payment a lot less painful by putting money aside throughout the year.
4. Don’t Procrastinate
April 15th is approaching whether you like it or not, so don’t wait until the last minute to file. Procrastinating only makes you dread the experience even more and scrambling to get it done at the very last minute only adds unneeded pressure and stress. Get your documents, receipts, paperwork, etc. together as soon as possible and just get it done. The weight will be lifted off your shoulders and you’ll feel a lot better.
5. Hire Help
Filling business and personal taxes can be overwhelming. There are many tax software options available to help you accomplish the task however, it may be in your best interest to hire a C.P.A. But don’t trust your taxes with just anyone. Make sure to get referrals.