When it comes to maintaining your business’s financial health, bookkeeping and accounting are paramount. However, a vital aspect of the overall equation is to prepare for the tax season and keep up with all tax filing requirements. The problem is that tax preparation and filing aren’t easy processes, especially for small business owners or solo entrepreneurs. As much as possible, you want to stay tax-compliant at all times and even save up on your taxes. The last thing you will want to happen is to fall behind on your taxes each year!
In this article, we will share four practical tips on how to stay on top of your taxes:
1. Track and monitor your monthly income and expenses
As far as bookkeeping and accounting are concerned, there is nothing more important than tracking your income and expenses every month. Along with this is to monitor them consistently and evaluate how your business fares. By doing so, you’ll be able to see how much money goes into your business and how much goes out to help you prepare your taxes and easily and quickly file them before the tax season arrives.
2. Record all transactions, keep receipts and consolidate bank statements
In line with the aforementioned, you must record all the transactions of your business, and this will require you to keep all the receipts for transparency and accountability. It’s also best to have a separate bank account for your small business, where you’ll put in and draw out money for all your business transactions. While you’re at it, be sure to consolidate your bank statements and accounting records with the receipts serving as proofs. All these recorded transactions will help you accurately file your taxes!
3. Take advantage of accounting tools and resources
What are tools and technology for? They are invented to make our lives a lot easier! When it comes to bookkeeping and accounting, and even filing taxes, it’s best to take advantage of these resources to make your life easier. They can make your financial recording, cash flow tracking, and tax filing more streamlined, efficient, and accurate. At the same time, you won’t need to do all these manually, which can be time-consuming, laborious, and daunting as a task.
4. Get a Certified Public Accountant (CPA)
When it comes to accounting and tax filing, it is always best to work with an expert? It’s best to hire a CPA who has the knowledge, skills, expertise, and experience in the industry, who will also prepare your finances for the tax season. They’ll handle your tax IRS forms and tax-related paperwork, file your federal and state tax returns, provide tax advice, and offer guidance on tax compliance. Ultimately, they will help you take advantage of tax-saving opportunities for the benefit of your business.
At this point, you now know how to stay on top of your taxes as a business owner. As outlined above, all it takes is to track and monitor your monthly income and expenses, record all transactions, keep receipts and consolidate bank statements, take advantage of accounting tools and resources, and hire a Certified Public Accountant (CPA). With all these key steps, you’ll be able to keep up with the tax season and stay on top of your taxes all year round!
Are you looking to stay on top of your taxes? Let our accounting experts near you help your small business taxes! We provide CFO, bookkeeping, and accounting tax services for small businesses and startups in Boston, MA. If you’re a solo entrepreneur looking for expert accounting services, schedule your free consultation with us today!