The tax season is here. The tax season is the period when business owners and general taxpayers engage in a race against time. It can be stressful and frustrating. To save yourself from the mad rush that comes with preparing and filing tax documents, you need specific strategies.
It is difficult to imagine the pain of being unprepared for your tax payment. Some surveys have stated that most Americans would rather be without cellphones for up to a week than file their taxes. Yeah, I know it is difficult to imagine, but that is how much people dread filing their taxes.
In this article, I will provide you with simple strategies to help you not dread this tax season.
Early preparation is key
I would encourage you to begin your tax preparation early. You can start as soon as January to prepare. The US government estimates that at least 65% of taxpayers use preparers to file their tax returns. If you belong to this group and hope to beat the rush, then early preparation is key. You need to start gathering all the relevant documents. Make use of DMS for Proseries to assist your tax preparation process. The primary function of this is to organize and manage your documents. They will help your firm become more efficient as well.
Early preparation means gathering all the information you will need, including receipts and other financial documents. You should verify all the data, and make sure it matches your income records. The revenues you would pick usually depend on whether you want to enumerate your deduction or use the standard detection.
Furthermore, if you have made any charitable donations, you need to make sure you have the necessary documentation to support your claim. These documents will come in handy if you are looking to claim any write-off. As an example, for a donation above $250, you need to have written acknowledgement that you received nothing in return for your donation except in some cases a token—mostly small items given by the charity to show appreciation.
Another part of your early preparation strategy would be to list your personal information. Usually, you would be aware of your own social security number, but you might not know that of your employees. You should try to have this information noted down somewhere. Also, jot down the addresses of any vacation homes you may have. All these details might mean little to you, but they are vital when you are filing taxes.
Understand the role of your finance team
Members of your finance team will include accountants (sometimes specifically tax accountants) and bookkeepers. Having a clear understanding of the individuals involved will make the process of tax filing easier. The role of your accountants is to prepare financial reports. Their role also includes ensuring quarterly taxes are paid promptly. The bookkeepers’ role includes tracking expenses and reconciling accounts. They also manage and classify invoices and receipts.
Tax accountants obtain information from the job done by the bookkeepers and other accounts. They then use this data to make vital tax adjustments. They also prepare quarterly tax payments. Tax accountants also recommend how to reduce tax liabilities. When you have a full understanding of the role of these people, it makes the tax process a whole lot easier.
Regular communication with the finance team
A weekly open line of communication between your finance team would help you ease the tax preparation process. Proper notification would eliminate issues like:
- incorrectly calculated expenses or recording your expenses in the wrong category
- Overlooked credit or loans, which may even cause your business to miss out on one deduction.
These major causes of incorrect tax filing show why regular open communication is crucial to your tax preparation process.
Contact your tax preparer early
Early contact helps to make the tax preparation process faster and smoother and encourages those involved to be ready for the tax filing process. This makes for a smoother and more straightforward tax process.
In addition to contacting them early, bring in your tax preparer quarterly. This means they won’t have to start from scratch when it is time to file your tax. Learn more about tax return time from this article on Nerd Wallet. Another benefit is that the tax preparer will communicate with your finance team frequently, improving team efficiency. These regular meetings will reduce any pressure and stress that might be on the finance team during the tax season. The adage, ‘an ounce of prevention is worth a pound of cure’ is very relevant in this case.
There you have it. I have given you four of my best strategies to make your tax preparation easier this tax season. Try them out and tell your associates and friends about them. They will help you, as they did me, to beat the craziness of the tax season. I wish you all the best.
You may also like: 8 Money-Saving Tax Tips for Small Business Owners
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