Tax season, the most dreadful time of the year for nearly all Americans, especially for small business owners. However, it could be less of a drag if you and your business are prepared for it throughout the year. Being organized is vital to achieve peace of mind and ease of filling taxes, yet even the most organized people can get stressed out because of the grueling and demanding nature of tax payment, document preparation and filing them. Unless you don’t hire an accountant or tax specialist you will have to start preparing for tax season long before it actually arrives.
Within this article 5 simple steps have been discussed which if executed properly will aid you to get ready for tax season:
What to itemize and what not to
When filing taxes as an individual, you get a choice between itemizing your deductions or, opting for the standard deduction. By taking this decision early on in the tax year will help you track and safe keep all documentations as well as it will help you keep an eye out on what you should be spending and what you shouldn’t be as every dollar that you spend is deductible. Most common itemized tax deductions include, charitable contributions, health insurance if you’re a small business owner, including a few other deductibles.
Small business owners, can claim certain expenses that they incur as business expenses during that tax year, they will though have to prove and justify those expenses as business expenses to the IRS. In order to justify it you will need documents and receipts proving your expenses and their justifications. A good way to do it is to get transactional statements or bills through email, or through bookkeeping applications. If you have the documents in a printed form, an application such as Monily will only need to have a snapshot taken of the document to be readily available digitally and reflected on you books.
If you choose not to use applications and aren’t so tech friendly, you should still keep a digital copy of the documents in the form of a PDF, just to be sure.
Maintain records of donations
If you make donations to different charitable organizations or have accounts to be paid for different services you have foretaken such as for your accountant, you can include a portion of the sum as a tax deduction. These organizations will also send you a document entitling your yearly donations and payments that are deductible from your taxes.
Being organized is key
Just as the suggestion in the introduction of this article, in order to have a smooth sailing tax season. You need to be organized throughout the year. But if you had a single platform that would manage your books as well as get you tax ready, now wouldn’t that be a breeze? Monily does just the same, it becomes your unified platform for all bookkeeping, keeping you stress-free with regards to collecting, gathering and managing all document needed for the tax season.
Mark your calendar
If you miss the dates, you will have to bear through penalties and might even get into quite a pickle. Make sure you mark your calendar and set constant reminders pre-emptively, to eliminate the risk of the date slipping by. For your business you will have to declare quarterly taxes, which means January, April, June and September.
Working on your taxes and their documentations in a timely manner, would not just reduce you of useless stress, you could probably even be able to save some extra cash by keeping your books clear. Be sure to get ready for the tax season, and stay organized as well as following the above pointers will help you and your business to be all set to face taxation.