Preparing your Start-Up for Tax Season

Apart from the common and popular tax deadlines, there might be deadlines specifically applicable to your industry or business area. These must be effectively tracked and met. Be in the know of all federal and state deadlines and keep the required documents and amounts to be paid handy.

All the entries, statements and deductions in the tax return submission has to be supported by validating records. Accurate records have to be provided as proof of stated Revenue, credit, expenses etc on the tax return submitted. Thus, having a proper system of maintaining records will aid you to handle tax season with ease.

The approach you take to track and document your transactions will be a deciding factor on how well you navigate through a tax season. There are various automation a small business can rely on for instance automated inventory systems help track all inventory transactions over a period of time and can give insights into inventory requirements. Such information and automation can help maintain optimum inventory levels avoiding surplus stock storage expenses. Handling accounting manually or through spreadsheets could be limiting and confusing.

Bank account reconciliation can be facilitated by excel, other software or manually by comparing transactions in a bank account to accounting records. If there are mismatches the reasons must be identified and rectified to balance them out. Depending on the accounting tools you use, there could be in-built features to help this process on the go.

If accounts are not reconciled ahead of time, it might lead to additional charges.

Right as you approach a tax deadline, you might realize that some key documentation and information for filing returns are missing. There might be an urge to pretend that nothing is wrong and just move on, but it’s wisest to tackle such issues as you go at the very first instance you sense them. If you have a tax professional on board, they probably have the experience and expertise of dealing with such scenarios and can help you sort things out with the right advice.

Making sure you have all your spending noted and organized will make tax season less overwhelming and would also help your tax professional to get you the maximum benefits possible based on these well recorded transaction information.

If payments are to be received from clients, ensure that they’re aware of specific tax deadlines apart from federal deadlines and understand the consequences in terms of penalties of missing deadlines. The penalties would have to be borne by clients in long term.

Before filing your tax return, consult your accountant or bookkeeper after making sure you’ve done all the expected tasks from your end. Apart from guiding you through the filing process and clarifying your queries, based on your preparation, they would be able to verify the accuracy of your tax return and may also bring to attention additional credits or deductions that you may have missed out on.