4 steps to achieve success in business tax next year
4 steps to achieve success in business tax next year
Note: The IRS has Extend the tax period Due to the coronavirus, 90 days are provided for individuals and businesses.If you have any questions or need advice Adjust your business area In the meantime, we are here to help you.View Fundbox’s Coronavirus Response plan and resources.
After you submit your business tax, it is easy to close your business tax account books, but now dealing with more tax-related tasks can make you successful next year.
“It is important for business owners to pay taxes as early as possible,” said Brandon Pfaff, a certified public accountant and member of the advisory board. Wealthy life today“One of the easiest ways to do this is to think of it as soon as they submit their application.”
“Many business owners wait until the last minute to organize daily records,” said Christina Sjahli, a certified public accountant and owner. Christina Sjahli Consulting CompanyShe said that this will not only cause unnecessary pressure, but also damage the financial situation of the company. If you lose your receipts or documents, you may not be able to claim certain tax deductions.
Instead of delaying your tax preparation, it is better to advance. Use Q2 Viewing your business finances can help you save money, avoid audits, and set better financial goals. Please follow the following four steps for final tax preparation.
1. Review your tax return with an accountant
It’s important to check your tax return for errors before submitting, but it’s also important to check your tax return Rear Also file for the record. Sjahli said that you need to understand the difficulties you or your accountant encounter when preparing tax returns, “so that you can improve your business processes next year.”
Take time to ask questions Regarding your depreciable assets, deductions, refunds or payments. Sjahli said, for example, you might notice differences in taxable income and income statements, and it’s important to understand why.
You can also use audits to re-evaluate your company’s management processes or record keeping methods. For example, if you have trouble keeping track of all business expenses, ask yourself why. “Do you need to create a new expense category to make it easier for your tax accountant to identify tax deduction? “Xia Li said. Or maybe you need to invest in bookkeeping software.
The more you know about business tax and finance, the easier it is to make informed financial decisions and identify areas for improvement.
2. Organize and update financial documents
Organize your business’s financial documents Now it can not only save you time for the next tax season, but it can also ensure that next year’s taxation is more accurate. “Save all Related documents The return from the new submission is the most important,” Pfaff said. This includes income statements, balance sheets, receipts, invoices, and cancelled checks.
Before you put away the file, re-examine your file system to make sure it is valid. Pfaff says you can arrange the files in chronological order, by year, quarter, and month. Or, archive by customer, project or supplier, Sjahli said.
When organizing the documents, please leave out any content that needs to be updated, such as balance sheets and income statements. Sjahli said it would be helpful to update this information to clarify your tax refund or taxes. Finally, make sure to store the files in an accessible but safe place. “In the case of loss or damage to the on-site computer system, saving the document to a cloud storage drive is a good choice,” Pfaff said.
If you have not invested in accounting software, now is a good time.Platform like Fast book Can help you track corporate finances and monitor accounts payable and accounts receivable.Other applications such as Expensed Allows you to scan and upload receipts while Stride Track the mileage of your vehicle.
3. Arrange taxation and registration
Planning ahead can help you stay organized and prevent unwelcome financial surprises. Pfaff said that taxes must first be paid on time. “Ensuring you pay the IRS or having a payment plan can save you a lot of fines and interest.” From there, he recommends arranging your quarterly estimated payments to “reduce any potential underpayment fines.” Try adding reminders to your calendar or setting up automatic bank deposits.
It is also a good idea to schedule regular check-in with your clients Accounting. Pfaff said: “Although external help seems unnecessary, quality consultants are as valuable as gold.”Working with accountants Or filing taxes regularly can also help you stay ahead of what may happen in the year. “Think about it: Estimate quarterly payments or assess short-term funding needs.
4. Develop a financial plan
Committed to growing or updating your business” Financial plan“Without financial planning, your business may lose its way and lose its strategic execution ability,” Pfaff said.
Sjahli said that the first step is to formulate an annual budget and then break it down into quarterly, monthly and weekly plans to keep it on track. Include the following in your plan:
spend: This part is divided into fixed costs and variable costs.The fixed costs are wages, rent, and Loan payment, And variable costs include inventory, utilities, supplies, marketing and advertising, and office updates or maintenance. Make sure to also include one-time expenses, Sjahli said, such as relocation expenses.
Proof of income: Include your business’s income, cost of goods sold, and expenses to show how much profit your business has made.
Balance sheet: List your business’s assets, including cash, property, accounts receivable and equipment, and your business’s liabilities, including loan payments, accounts payable, and income tax.
Cash flow statement: Calculate the difference between your business’s outgoing cash flow and cash flow income to see if your number is positive or negative.
Growth projects: Overview Growth project Sjahli said, you plan to finish this year, and their cost. This may include deposits for new office space, upgraded machines for large projects, or bulk supply orders for new products.
Pay tax in advance
Preparing now for next year’s taxes can save you time, money and sanity.also Working with accountants, Focus on organizing your financial documents and making plans to track expenses, minimize deductions, and ensure stable cash flow.
Disclaimer: Fundbox and its affiliates do not provide tax, legal or accounting advice. This material is for reference only and is not intended to be provided and should not be used as a basis for tax, legal or accounting advice. Before conducting any transaction, you should consult your own tax, legal and accounting advisors. For information about tax laws and how they apply to your business, please consult a tax professional.