by Contributor
(Nov. 30, 2021) — Tax season is almost here, but there are still several things you can do to get your business ready.
Here’s a look at 6 things you should be doing now so that come April 15th, you’ll have all your ducks in a row and won’t have to stress out about preparing for tax season.
1. Create a system to track all expenses
Streamlining the process of recording business-related expenditures is an integral part of any good accounting system.
Do you keep receipts in envelopes, shoeboxes, or some other form of disorganized storage? If so, it’s time to create a system that will help you stay organized throughout the year.
2. Keep your records organized
Keeping track of your income and expenses is essential for tax purposes. It not only helps with filing on time but also keeps you aware of your financial status.
3. Be sure you have the proper documentation for everything
Keeping good records is necessary to support business-related deductions on next year’s tax return, but if you don’t have the proper documentation to prove that certain purchases are deductible, it might be difficult to convince the IRS.
4. Make copies of all your important documents and store them in a safe place
A disaster can strike at any time, so it’s smart to make copies of everything and store them in a safe place.
Here are some items you should copy: bank statements, tax returns, financial statements, and other documents related to your business.
5. Get an accountant to help with filing taxes if necessary
If you’ve never filed a business return before or have limited experience, it may be a good idea to hire a professional to help you get started so that nothing gets overlooked.
6. Make sure you’ve completed your sales tax registration
Sales tax registration is required for every business that sells goods or services to customers in any state.
There are usually three main types of tax registrations:
a. The first is the sales tax permit, which businesses acquire from their local revenue agency to collect state and local taxes on transactions made within its jurisdiction. This registration allows the owner to establish a seller’s permit for each location they have.
b. The second registration is a resale certificate, which states that the business will only purchase goods from other businesses that have a sales tax license and will claim the tax paid on their own return. This type of registration allows you to buy items without paying sales tax.
c. A sales tax identification number is obtained from the revenue agency where you plan to sell or use items. This ID must be provided on sales receipts and all other forms of documentation for sales transactions.
Conclusion
Preparing for tax season can be overwhelming, but with a little time and effort, you’ll have the system you need to file your taxes quickly and get on with running your business.
The last thing you want to do is wait until the last minute to get your business in order. Take these steps now so that come April 15th, you’ll have all your ducks in a row and won’t have to stress out about preparing for tax season.