4 Tax Preparation Tips for Small Businesses

 

Tax season is right around the corner and quickly approaching. You don’t want to wait until the last minute to file your business taxes. In fact, it’s better to plan ahead and prepare so that you know what to expect financially and are able to get your taxes done faster. Here are four great tax preparation tips for small businesses!

Hire the Right Accountant

The first thing to remember is that there is nothing wrong with seeking professional help for your business taxes.

 

The best way to prepare for tax season is to invest in an accountant before tax season so that they can assist you throughout the entire year.

 

The right accountant will do more than just your taxes, instead of working with you to track financial transactions, profits, etc.

 

A good accountant helps you properly maintain your finances the entire time so that when it’s time for tax season, everything is already organized and in place.

Separate Business & Personal Accounts

When kicking off a small business, it may seem easier to just keep those finances in your personal account.

 

However, even if you reported all business expenses correctly, the IRS now has access to your personal account.

 

They can look into your personal account because of the combined money and this could end up impacting your tax information.

Keep Financial Records

It is so important to keep track of all your business expenses, both internal and external, as you go along. If you are unsure of the proper way to keep track of your finances, a professional finance service can help.

 

Bookkeeping has been made easier due to digital software, but a professional can ensure that all expenses are accounted for and also analyze financial information to help improve your small business and keep it growing.

Claim all Income Reported to the IRS

Trying to get over on the IRS is never a good idea because they most likely have access to the information that you are trying to withhold.

 

The IRS gets a copy of the same 1099-MISC forms that you receive, so they know exactly how much income your business has made within the year.

 

They compare the amount you made to the amount you reported and if they don’t match, it’s a red flag for the IRS.

Contact PL Consulting Today to Prepare for Tax Season!

At PL Consulting, we consider our clients part of our team. We provide full financial management services including bookkeeping, accounting, payroll, tax preparation, budgeting, and more.

 

Serving the Baltimore area for several years, we are dedicated to providing customized service to fit each and every one of our client’s unique needs.

 

To book PL Consulting today or get more information, contact us at (410)-764-3731 or at https://www.plcfo.com/contact/

The Benefits of Annual Book Cleaning

Your bookkeeping records keep track of all internal and external financial transactions made from your business. Though you should be cleaning and organizing your books as you go, it is especially important to do so at the end of every year. Having a clean set of books at the start of the year allows you to analyze the financial progress of your business over the course of the year. Here are some more great benefits of annual book cleaning for your business!

annual book cleaning

Tax Preparation

One of the main reasons you should clean up your books before the years end is to help prepare you for tax season.

 

Procrastination is way too common when it comes to taxes, but the earlier you get them done, the better off your business will be financially.

 

Cleaning up your books makes it easier to determine your estimated income for the past year as well as an estimate on taxable income. Cleaning up your books before the year’s end also allows time to make financial decisions that could possibly lower your taxable income for the season.

Business Analysis

If you don’t keep your books clean and organized, it’ll be difficult to keep your business organized as well. Cleaning your books at the end of the year allows you to go back and see how much money you made and lost in the past year.

 

You can get a better understanding of what brought in more money versus what caused your business to lose money. You can analyze which sales methods were more effective, what expenses went outside of your budget, and more.

Fresh Start

After analyzing your business books from the previous year, you can now plan properly for the upcoming year. Starting the year fresh, organized, and with a plan in place will allow your business to have a strong start in the new year.

 

If you don’t have your books cleaned up at the end of the year, the start of the new year will be quite unorganized and your business may end up making the same financial mistakes as the prior year.

 

A clean set of books gives you something to refer back to without being overwhelmed and helps you to create a concrete budget for the upcoming year.

 

Organization is key to the success of any business, especially when it comes to finances!

Contact PL Consulting Today to Clean-Up Your Books!

At PL Consulting, we consider our clients part of our team. We provide full financial management services including bookkeeping, accounting, payroll, tax management, budgeting, and more. If you have questions on annual book cleaning give us a call.

 

Serving the Baltimore area for several years, we are dedicated to providing customized service to fit each and every one of our client’s unique needs.

 

To book PL Consulting today or get more information, contact us at (410)-764-3731 or at https://www.plcfo.com/contact/