It comes every year like clockwork and yet it still comes as something of a surprise. You know that you need to prepare for it in advance but there are so many other things demanding your attention. When you are running a startup there are a million things to do. It’s easy to let things slide but, before you know it, it will be tax season again. You want to get ahead of the game and ensure you get all the tax deductions for startup businesses. You can hire an accounting professional but there is still a lot of prep that you need to do. In this article, we will give you some tips to prepare your startup for tax season 2020.
Keep Your Financial Statements Updated and Accurate
Generally speaking, it is important to keep on top of your financial statements. You need to put in regular effort into maintaining your records. It isn’t just beneficial at tax time either. Your accurate financial statement gives you a picture of the health of your business. They let you know about your operating revenue, profit margins, and liquidity. When you hire an accounting professional to do your business startup tax return, it will be your financial statements that they rely upon to simplify the process of preparing your tax returns.
When you are busy starting a business, it is the right time to get off on the right foot. You should establish sound bookkeeping practices from the get-go. Your business might be small or a bit larger but there a number of options out there. There are many providers of accounting software that offer options that are tailored to your company’s style, budget, and industry. Some accounting software will assist you in important things like automated billing and inventory management. Once you have the right accounting software, you need to stay on top of entering transactions on a daily or weekly basis. You should also be diligent about reconciling your bank and credit card statements every month. Doing this will help you keep accurate records. That will help when you search for “small business tax advisors near me” in order to get some help with your tax returns.
It can’t be said enough, you shouldn’t put off preparing your financial records until tax time. It should be a year-long process. You will need to verify all the expenses and tax deductions for startup businesses that you claim on your tax returns. In order to do that you will need to record your receipts and invoices throughout the year. In addition, you will need to keep good records on your employees and contractors in order to simplify the process of issuing W2s and 1099s at tax time. When you make asset purchases it is important to keep records in order to calculate the asset’s depreciation and maximize your allowable deductions. Accounting software allows you to upload and organize receipts. Some accounting software even lets you attach files directly within the software, making the organization a breeze. Whichever software or method you use, it is important to make organizing your financial records a constant habit in order to make it easy to prepare your business startup tax return.
While you will no doubt quickly search for a CPA tax preparer near me, it is crucial that you, as the head of a startup, become as informed as possible about financial management. Right at the start, you should form the right type of legal entity for your business type and tax filing status. In order to avoid any problems at tax time, you need to research federal and state tax responsibilities. There is a lot to know about sales tax, corporate taxes, payroll taxes. Knowing the deadlines that you have to meet will allow you to get the paperwork ready in time. There are many federal (IRS.gov) and state-operated websites that can help. Also, many accounting software providers include valuable resources that will help you with variety services such as answers to general bookkeeping questions, live support, training, webinars, and information on tax forms.
With all the preparation that you have done, you may feel perfectly prepared to file your taxes. However, it is always smart to hire an accounting professional to go over your finances before you file. A quick search for “CPA tax preparer near me” will let you find someone who will help you stay within the tax code and maximize your deductions. They will not only find deductions that you may have missed but will also help you avoid costly penalties and ensure that your taxes are filed correctly. By staying on top of your financial records, staying informed about the tax code, and hiring a tax professional you can rest easy about filing your taxes in 2020, even if your startup is still giving you a million other problems to solve! Complete CPA looks forward to helping you save time and money, and gives you peace of mind. Call us now if you have any questions or schedule your free consultation online.