Although your business tax returns don’t need to be filed for a few months, the year is almost over. Small business owners – your tax preparation needs to start immediately! You should already have a detailed bookkeeping system in place and ensure you have records and receipts for your deductions, your accountant and tax attorney on speed dial and an open mind! You don’t want to be hit with any costly surprises.
But what happens if you don’t have any of these pieces in place? Is the thought of filing 2016 taxes for business already causing you stress? Here’s a list of things you can do right now to help you get ready.
- Get organized – talk to an accountant, bookkeeper or tax attorney today. Tell them about your circumstances and take their advice. Usually there’s a free initial consultation and they will provide you with a list of things you will need in order to properly file your taxes. Listen to them. You know your business like the back of your hand, they know the tax laws and guidelines for records. Follow their advice and get started now.
- Keep a detailed record of income – if you are using a tool like Quickbooks, this can be relatively easy. If you rely on other tools like Excel or Google Sheets to track your invoices, be sure its up to date and current. Locate those invoices and payment records and ensure your documents are up to date.
- Keep track of your expenses – again, if you are using a tool like Quickbooks, this is easy. Your expenses are important because they allow for deductions. Proof of expenses, like receipts or vendor invoices, are important to keep as well. We recommend using a monthly organizer from Staples or Office Depot in order to keep those receipts handy. Also, keep track of office expenses, especially if your small business operates out of your home. Phone, internet, rent receipts and records are critical at tax time.
- Track employee and vendor expenses – if you have employees, this can be more than just payroll. Health insurance payments, 401K payments and other deductions need to be tracked and reported.
- Track your business owner payments – your business probably pays you a salary, a stipend or “owners draw.” The money you take out of your business must be tracked as income. It is usually not lawful to keep all the profits from your business year to year.
If this seems like an overwhelming task, then you should consider using 2017 as a year to get established, get bookkeeping in place and work on getting organized so that next year you won’t have all of this work to do in such a short period of time. For now, if you need immediate help, contact the Law Office of D. Mathew Blackburn for advice. It’s best to seek our advice now, rather than submit your taxes and receive a “no so nice” letter from the IRS and have to call us later.