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:

  1. 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.
  2. Know your expenses: Know where your money is going. Keep your receipts. Learn about tax-deductible expenses
  3. 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.
  4. Keep your receipts: Shoebox, a folder on your computer or online storage (such as hubdoc) can do wonders.
  5. Pay Estimated Tax: Work with your bookkeeping or tax professional to calculate and pay estimated tax
  6. 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.