Getting Your Business In Shape For Tax Season

Nov 15, 2022

Tax season will be here before we know it, but is your business ready? It comes with a lot of unexpected twists and turns, from surprise audits, new forms, unknown policies, and maybe even a pandemic!

If you are already searching for tips on how to best prepare your business for tax season, congratulations — you are on the right track! In this article, we will share tips and tricks to help get your company in shape before tax season creeps up. 

Give Yourself Plenty of Time!

Scrambling at the last minute is no way to go about properly conducting tax season reviews. Be sure that you are keeping a secure filing and documentation system throughout the year of all paperwork and bills so that tax season is a little less scary! 

Organize your filing system and make sure to get ahead of the curve by checking to see if you have all of the required documentation your business needs. If not, at least you now have time to collect this information without scrambling to the finish line! 

Ensure Your Books are Balanced

Are your books balanced? Making sure that you have conducted proper bookkeeping so far this year is a great way to help your business prepare for a surprise audit and expected tax forms. Balancing books is no easy feat, especially if you do not have an accounting degree or are not an industry professional. 

Use Electronic Accounting Tools

So long, paper documentation! If you want this tax season to be your best yet, ditch your paper filing systems and go electronic. Luckily, there is an abundance of tools available to help you get organized and to know exactly what you need, prior to tax season. 

Many of these sites are low-cost and very affordable for small businesses, especially if you are looking to avoid fees and penalties from the IRS for filing incorrectly! Electronic accounting tools can also store your information year over year, so you don’t have to shuffle through papers in your filing cabinet to reference forms from years past. 

Set Aside 30% of Business Income For Taxes

As a golden rule, it is typically recommended to set aside at least 30% of your business’s income for taxes. While this may seem like overkill, taxes can take a huge chunk out of your profits, so you want to make sure your business has prepared and is budgeting correctly. During the year, set aside this cash to use for paying taxes, even if you are expecting to have some cash leftover! 

Talk to a Professional and Make Sure You Are Ready! 

Already getting overwhelmed when it comes to preparing for tax season? We are here to help! If you need general financial accounting advice, budgeting expertise, tax help, or any other money-focused support, contact Bottom Line Consulting today! You will be happy you did — both now and when you avoid penalty fees in the near future.