Tax preparation season is upon us. As entrepreneurs, it is up to us to ensure we are on the right path to proper tax filing, with the help of tax and accounting professionals, of course! Your local Orange County bookkeepers at Team One Accounting are ready to help get your business’ books cleaned up and streamlined for your CPA so tax-filing is a breeze. Here is a simple breakdown of how to ensure your books are ready for tax season:
Maintain Separate Business Accounts
Open a separate business bank account and credit card for all your business transactions. This is crucial in keeping personal and business finances separate and will simplify your bookkeeping and tax preparation.
Use Accounting Software
Consider using accounting software like QuickBooks, our favorite at Team One Accounting, to manage your finances. These tools can automate many processes and provide accurate financial reports so you can stay well-informed about the state of your business.
Record All Transactions
Consistently record all business transactions, including sales, expenses, purchases, and payments. This will help to eliminate any surprises when it comes to tax filing.
Reconcile Bank Statements
Regularly reconcile your business bank accounts and credit card statements with your accounting records to ensure accuracy and identify any discrepancies ahead of time. Your Team One Accounting bookkeepers are experts at this.
Organize Receipts and Invoices
Keep all receipts, invoices, and financial documents organized and easily accessible. Consider digitizing paper receipts using scanning apps or software for convenience.
Track Expenses Properly
Categorize and track all business expenses, including office supplies, utilities, travel expenses, and any other costs related to running your business. This helps maximize deductions and reduces the risk of overlooking deductible expenses.
Monitor Accounts Receivable and Payable
Keep track of outstanding invoices (accounts receivable) and bills (accounts payable). Follow up on overdue payments and ensure all bills are paid on time to maintain good financial health.
Perform Regular Financial Reviews
Review your financial statements regularly, such as profit and loss statements, balance sheets, and cash flow statements. This helps you identify trends, spot potential issues, and make informed financial decisions.
Stay Organized Throughout the Year
Don’t wait until tax season to organize your finances. Maintain clean and up-to-date records throughout the year to save time and reduce stress when preparing for taxes.
Consult with a Tax Professional
Consider working with a tax or accounting professional, like our dedicated QuickBooks ProAdvisors at Team One Accounting, who can provide guidance on tax planning, ensure compliance with tax regulations, and help optimize your tax strategy for your small business by working with you and your CPA.
If your books are not as clean as they need to be by the business tax filing deadline, March 15, we can clean them up while there’s still time! Alternatively, consider filing a
tax extension to add some breathing room if there is a lot of work to be done. Remember, we are here to crunch the numbers, so you can do what you love.
