This year’s tax return is signed, sealed and delivered and you can breathe a great big sigh of relief. Take a moment to relax.
But business marches on. And if the run up to this tax season was defined by 🙀PANIC🙀, you might want to approach next year differently. The best way to make it easier: start planning early.
Prepare throughout the year by organizing and categorizing your business expenses. Efficient record-keeping doesn't just make tax filing easy - it also helps you keep track of your expenses and produce proof during audits or lawsuits if required.
To reduce paperwork, keep electronic records. Always make sure to backup your digital records in different locations.
You should keep:
- Cash register tapes
- Deposit information, like cash and credit sales
- Receipts and invoices
- Canceled checks for other proofs of payment
- Documents or proof of transferring funds electronically
- Bank statements and credit card receipts
- Petty cash slips for small payments
- Accounts payable and receivable
- Tax filing records
- Previous tax returns
- Payroll records
- W2 and 1099 forms
- Any other documents that support expenses or deductions
- Set up a separate business bank account. This will help you distinguish business spending from personal expenses, ensuring a smoother and error-free record-keeping process.
- Get professional help. Sometimes, outsourcing is the best option. Your time is your most valuable resource. Is preparing your taxes the best way you can spend it? Online bookkeeping services like Fincent can free you up, so you can focus on your business.