December is here and in the midst of the holidays, taxes are the last thing you want to think about. Tax time can be stressful for everyone, but maybe most of all for small business owners! But it doesn’t have to be. Check out Encurio’s list of the top five ways to prepare for tax season.
- Communicate with your accountant. Your accountant is your most important asset during tax season. If you have questions about what to expect, your accountant has the answers. At Encurio, our goal is to take the fear out of tax season by providing clients with the knowledge they need. Most importantly, make sure you contact your accountant at least one month prior to the filing deadline. This way, if you need an extension, your accountant has the time to file and provide you with extension vouchers if needed.
- Understand your timeline. What type of business do you have and what is your deadline? Knowing your timeline will help you prioritize. Here are important deadlines to know:
- MARCH 15. Deadline to file your returns or file an extension for partnerships, multi-member LLCs, and S-Corps.
- APRIL 15. Deadline to file your returns or file an extension for C-Corps, single member LLCs, sole proprietorships, and individuals.
- SEPTEMBER 15. Deadline to file your extended returns for partnerships, multi-member LLCs, and S-Corps.
- OCTOBER 16. Deadline to file your extended returns for C-Corps, single member LLCs, sole proprietorships, and individuals.
- Gather your records. Have an idea of what forms you will need to provide and where you’re going to get them. Include any estimated tax payments made for the upcoming tax year – and don’t forget your fourth quarter tax payment in mid-January! Here is a list of other forms and records to collect:
- Payroll Reports (W2s/W3, 941, State payroll returns)
- Financial statements
- Information regarding assets sold during the year
- 1099s prepared and filed
- Close your books. If your tax preparer isn’t also your bookkeeper, make sure you’re communicating with your bookkeeper. Find out when your books will be closed and ready to deliver to your accountant for tax preparation.
- Meet with your accountant for tax planning. If you’ve reached December without tax planning for your upcoming tax year, don’t worry! You can file your taxes without it, but there are huge benefits to proper planning. Tax planning allows you to make decisions during the tax year that will save you money and help you project what you may owe on your tax bill. If you haven’t had tax planning in the past, budget time in the future.
If you’re trying to do your books on your own and are thinking about support from an accounting team, check out this blog post on why good accounting is important for your small business.