As tax season gets into full swing, you may be sweating how to get through the process smoothly. Perhaps this is the first full year your small business has been up and running, and you're not sure what to expect. Maybe there have been some significant changes in how the business operates. Or perhaps you have a cluster of paper and spreadsheets and you're not looking forward to organizing any of it.
Regardless, no one likes the headache, including the person helping you through the process. So how can you make this tax season go smoother, and how can you make the next one even less stressful? Seven Forbes Finance Council members offer these tips, ranging from ditching the shoebox to setting checkpoint meetings to making sure your information is up-to-date throughout the year.
Clockwise from left: Louie Balasny, Justin Goodbread, Gregory Ostrowski, Ryan Marquis, Robin Hall,... [+]
1. Don't Keep Your Data In A Shoebox Tax time is usually a scramble. How do you make it simpler? Get a good bookkeeper and ditch your shoebox full of receipts. Your accountant hates that shoebox and most importantly, you're not the only person they're doing this for. Good bookkeeping means everything is in order and updated for your filing. It also means you know how your company is operating more often than once or four times a year. - Louie Balasny, botkeeper
2. Use Accounting Software Throughout The Year
Tax time can be daunting. As a business owner, I have found it a best practice to use financial accounting software throughout the tax year. I personally use a virtual assistant as a bookkeeper for my business throughout the year, and this has helped. When it's time to file taxes, I have correct info to provide to my CPA and I am not scrambling through a year's worth of records. - Justin Goodbread, Heritage Investors
3. Set Checkpoint Meetings
Proactive tax maintenance throughout the year leads to fewer surprises at filing time and a better understanding of your key performance indicators. Not only will you break tax prep into smaller ongoing chunks (such as quarterly), but if you structure your checkpoint meetings properly, you'll better understand your income statement in no time. Know your numbers! - Gregory Ostrowski, Scarborough Capital Management
4. Request A Tax Preparation Document
Request a tax preparation document in advance to ensure that you're getting all the breaks and deductions to which you're entitled. Your CFO and tax accountant should be your best friends in the weeks and months leading up to tax time. - Ryan Marquis, Plastc, Inc.
5. Prepare Invoices For Any Write-Offs
IRS changes may provide additional write-offs, such as an increased cap policy limit for small businesses. This may provide an increase to your current policy that would allow you to deduct additional items. Be prepared with invoices and explanations for any repairs, routine maintenance or property improvements that occurred, as they may now be eligible expensing in 2016. - Julio Gonzalez, Engineered Tax Services Inc
6. Plan Ahead For Important Deadlines
To simplify the filing process, plan ahead. Be aware of important deadlines that may affect your small business. Use an accounting software to keep track of income and expenses. If you cannot, be sure to schedule a monthly review of your business finances and use reminders/alerts to make sure everything is up-to-date and correct. - Stacy Francis, Francis Financial, Inc.
7. Remember That Your CPA Is Not Your Bookkeeper
The best things you can do are these specific things each and every month: entries and reconciliations on all your accounts. This way you are not scrambling at the end of the year to compile your financials. Your CPA files a return based on your numbers, so do not rely on them to be your bookkeeper. Be consistent and follow a set plan for keeping your financials in order throughout the year. - Robin Hall, VARC Solutions
