When you think of taxes, you think of them once a year and don't want to think about them the rest of the year. But with some pre-planning when it comes to tax time, it will be a lot easier and you will wonder why you were so stressed about them.
Keep Current
One of the best tips when it comes to tax planning is to keep up on your book work. When you run a business, it is best to keep your books current as it makes them a lot easier to do. Trying to record transactions that happened many months ago can be difficult as you won't remember the details and why you did things the way you did.
Be Organized
Keep up with organizing your paperwork. It will save you a lot of time, effort and frustration later on when you need to find a specific piece of paper. As well, when you are going to visit the tax accountant, you can easily find the paper you require instead of scrambling to find it.
Talk to a Professional
If you are just starting your business, you should talk to an accountant, preferably one who handles taxes. They will be able to give you advice on what type of information you will want to keep track of to make tax time easier and tips to help you with your bookkeeping. They may be able to get you setup with a bookkeeping system which will go a long way.
Depending on what time of year you start up your business, you may feel you don't need to talk to the accountant yet but do you really want to go back and do months of paperwork because you waited to find out what to do? Keep in mind, if you are doing well, you may want to do quarterly tax payments so you don't get such a large bill at tax time. Talking to a tax accountant will help you determine how much you should send to the government on a regular basis.
How to Prepare
Before you go to your meeting, you will likely want to get some paperwork together. What you need will vary depending on what you are planning to accomplish at your meeting so your accountant may provide a list. But if in doubt, you will want to print out a copy of your prior tax return and any financial information you have for your business such as a balance sheet, a list of any assets the business has or you may be looking at getting, and a profit and loss statement.
If there are any questions you have, make sure to write them down and bring them with you. For instance, you may be wondering if you can use a portion of your house as a deduction. They will ask you some questions about square footage and usage and advise you from there.
Make sure to ask how much it will cost to prepare your tax return and an approximate time line. Know that the first time the bill will likely be more as they have to figure out your information. They will likely provide advice to make the second year go smoother.
J.R.'S TAX SERVICE