It comes every year like clockwork, yet it still comes as a surprise. You know that you need to prepare for it in advance, but so many other things are demanding your attention. When running a startup, there are a million things to do. It’s easy to let things slide, but it will be tax season again before you know it. You want to get ahead of the game and get all the tax deductions for startup businesses. You can hire an accounting professional but still need to do a lot of prep. This article will give you some tips to prepare your startup for this tax season.
Keep Your Financial Statements Updated & Accurate
Generally speaking, it is important to keep on top of your financial statements. You need to put 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 inform you 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 several options exist. 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 daily or weekly. 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” to get some help with your tax returns.
It can’t be said enough: you shouldn’t prepare your financial records until tax time. It should be a year-long process. You must verify all the expenses and tax deductions for startup businesses 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 of your employees and contractors to simplify the process of issuing W2s and 1099s at tax time.
When you make asset purchases, keeping records to calculate the asset’s depreciation and maximize your allowable deductions is important. 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. Regardless of the software or method you use, it is essential 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, and 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 various 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 you may have missed but also help you avoid costly penalties and ensure 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, 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 giving you peace of mind. Call us now with any questions, or schedule your free consultation online.
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