With tax season over, you probably don’t want to be thinking about anything to do with taxes for the rest of the year. Hopefully you were prepared and filing your taxes was a breeze. But many people procrastinate, don’t have a filing system for their business records, or realize they need professional help at the last minute. If you’ve been in any of these situations, you can get a jump start on next year and ensure a smoother filing process by taking the following steps.
Don’t Wait Until the Last Minute
Procrastinating taxes is problematic for multiple reasons. For one, if you aren’t prepared you could end up missing deadlines and pay some pretty hefty fines because of it. Additionally, if you wait until the 11th hour to do your taxes, you’re likely going to be stressed and overwhelmed, two emotions that lead to mistakes, and mistakes in taxes generally means fines. Saving receipts and spending time as you go along throughout the year will make the process much easier. Life moves quickly, and if you don’t regularly update documents, it’s very easy to forget about expenses you could claim come tax season. Which leads us to our next point…
Know Your Deductions
To get the most bang for buck when filing taxes, make sure that you are aware of what you can actually claim as an expense on your taxes. For example, if you’re constantly using your personal car for work related activities, you can claim for that. Did you just start your company this year? Startup costs are another area that small business owners often don’t realize can be deducted. Often times, small business owners aren’t aware of the different deductions that are available to them. Knowing what you can claim can lead to a higher return, and ensure that you’re properly categorizing everything that you should be. Learning these deductions now and keeping track of them throughout the year will make tax season smooth sailing.
Phone a Friend
As we’ve acknowledged, tax season can be overwhelming and confusing but help is available. You can hire a tax preparer, financial advisor, or accountants and bookkeepers. It’s so easy to make a mistake when filing taxes and some mistakes cost more than others. Besides just being too busy to file taxes yourself and stay on top of it throughout the year, you may be ready to outsource this if you have tried the DIY method and ended up with penalties. Another time to ask for help? If you continuously need to file for an extension. Extensions are ok to have since they exist for a reason, however, they can be stressful especially because you have to for sure make that deadline. Getting some help should help you filing with the regular deadline every year, and avoiding the stress of an extension.
Another thing to keep in mind before next year, if you did get help from somebody but it didn’t go the way you wanted, start looking to make a change now. It helps to build a relationship with somebody handling your money and starting that right before tax season can be overwhelming. Plus, as an example, if you’re looking to hire a tax preparer, you may struggle to find somebody available once you’re in the midst of tax season.
The best way to have a smooth tax season is to stay on top of it through the year and get help when you need it. For extra help, have a calendar that lists all deadlines for the year to make sure that you’re staying on track. Taxes are complicated, but don’t have to cause you all kinds of headaches if you take the time to prepare.