6 tips for a smooth tax season
With a sigh of relief, we all know tax season is over. But have you ever considering planning throughout the year so tax season is nothing but smooth?
I know, it sounds crazy and, maybe, a little bit over the top. But as an entrepreneur, small changes can make a big difference in the time and money you spend filing your taxes.
Here’s a few small steps you can take to be prepared for tax season:
- Have a bookkeeping system in place: Regardless if it’s a spreadsheet, a system, if you outsource or if you DIY – make your bookkeeping part of your business routine. Seat down with your numbers once a week.
- Know your expenses: Know where your money is going. Keep your receipts. Learn about tax-deductible expenses
- Hire wisely: If you have payroll employees – file your taxes. The easiest way to be compliant with this portion is to hire a payroll professional or use an online system that calculates and file taxes for you. If you have 1099 consultants – make sure to get their W9 and track how much you pay them.
- Keep your receipts: Shoebox, a folder on your computer or online storage (such as hubdoc) can do wonders.
- Pay Estimated Tax: Work with your bookkeeping or tax professional to calculate and pay estimated tax
- Save money for Taxes: As a rule of thumb, set aside 25% to 30% of your profit for taxes. We recommend opening a savings account for this. Planning is the best way to avoid unexpected expenses.
I’m a true believer that a little extra work beforehand and save so much time – and money – in the long run.
If you’re looking to set up your bookkeeping, clean up your books or hire a bookkeeper on retainer – check out our services and our template shop.