This year, if you have delayed your tax planning and filing, then these last-minute tax tips could be just what you need as you face the looming deadline. Company owners also accept that the most difficult time of the year is the tax season. You not only need to think about paperwork, the crunching of figures, and financial reports. But when you consider the bills that need to be paid to the IRS, there are also cash flow issues.
Even though filing taxes as a business owner can be a stressful experience, when you have a strong team to support, there is nothing to worry about. To ensure that the taxes are submitted promptly and properly, an experienced accounting and bookkeeping team can be an invaluable resource. You can take assistance in last-minute tax tips with Autofilings.
Tax Tips for Your Small Business
When you are facing the last-minute crunch of completing your filing for the year, here are some of the best tax tips.
1. Deductions to Lower Taxable Income
Even though it takes a little more time to go through receipts and categorize expenses. If you want to decrease the sum that will be billed, this extra phase is necessary. There are several deductions for company owners which can be used to minimize taxable profits. To avoid raising red flags with the write-offs, just make sure you remain within the rules set by the IRS.
2.Get Your Bookkeeping in Order
To get prepared for tax time, the first thing you need to do is get your bookkeeping in order. You would need to receive all of your receipts and bills from transactions made during the tax year, as well as your bank account statements and customer invoices.
Also, read about Automated Bookkeeping that can help you.
3.Reconcile your Credit Card and Bank Accounts
Make sure that all the income and expenditures have been correctly categorized and checked, and that taxes are accounted for in each transaction. Then reconcile your bank and credit cards to make sure all of the charges appear in your accounting reports in your monthly statements, and that there are no duplicates.
4. Update your Expense Records
Next, pay off any debts that are unpaid right away. Take note of any expenses that you have used, but have not yet been compensated, such as bills for telephone, gas, and electricity, and also any expenses that you have pre-paid but have not yet used, such as insurance, leasing, and some types of equipment. Don’t forget to mention any personal costs that you use for your company as well.
5. Keep Updating Your Income Records
Check for billable sales or services for which you have not yet invoiced and sent out such invoices. Follow up on any unpaid invoices and give late customers final payment notices. Start calling if you need to.
Take note of any customer deposits you have received for work that you have not yet completed, as well as work that you have begun, but that you can’t invoice for just yet. We’re going to cover those in a bit.
6. Run Your Final Payroll
Remind your workers to request any unpaid reimbursements for expenditures and complete your payroll. Make sure that this final payroll is represented in your books and, after you obtain your final payroll reports, create any required journal entries for modifications. For it to be registered in 2020bear in mind that the final verification date should be in 2020.
7. File an Extension if You Need to
These are important last-minute tax tips. Examples: The filing deadline for
2016 returns are March 15 for calendar-year corporations. And April 15, for individuals, partnerships, and LLCs.
If you’re not able to fulfill your return for any reason, you’re suggested to request a filing extension. Partnerships, LLCs, and corporations should use Form 7004.
8. Know How your Business is Organized
Real estate, partnership, S-corporation, LLC, or C-corporation – the way business is built makes a huge difference when it comes time to pay Uncle Sam. Remember how your business is organized so that you can file the appropriate tax returns and receive the rebates you are entitled to receive.
9. Manage Paperwork
Assigning cluttered paperwork to your accountant is the wrong way to prepare taxes. While your accounting team can assist with financial strategy and tax filing, you should not be responsible. As a small business owner, you should have a general idea of your bank statement, financial report, cost, profitability, and more. Do your part to manage the paperwork so that your accounting team can sort through the numbers and support your strategy.
10. Electronic Filing and Payment
Now that you have been down for the past few days, it makes sense that you should take advantage of the digital options for tax filing. It has been found that paper filing increases potential errors and the possibility of losing paperwork, resulting in late fees and penalties. We live in a digital world, which means you have to take advantage of the digital devices that are available to you. The simplest solution is to work through your professional tax preparer to complete the digital filing. You can also make a direct deposit payment online to avoid the need to go to the post office to send a postal check for payment.
11. Do not Make These Common Mistakes:
- Do not record your assets as an expense. Your large assets and equipment purchase add value to your business, so they are not considered costly.
- Make sure you keep track of how you record your purchase. Retail goods and materials are considered available.
- Do not record owner withdrawals as expenses. This is a reduction in proprietary equity, not business costs.
- Never record loan payments as expenses. They should be distinguished between the principal interest on the loan and the interest rate.
- Once you have saved your savings, made the necessary changes, and converted your income and expenses from the collection into cash (if necessary), then you are ready for the end of the year.
12. Report All Income
Failure to report income may determine the effect of tax liability. One problem with wanting to get rid of your taxes at the last minute is that you can ignore important details that should be included in a tax return. Every time you get a 1099 form, remember that the IRS gets the same information. Failure to report the proceeds could result in a thorough IRS investigation. Even if you do not receive a 1099 contract form completed, you are still obligated to report your tax return. It is important to follow this information throughout the year so that you can be careful in reporting the exact figures for your benefit and expenses.
Before filing your business taxes, remember to work closely with an experienced accountant and verify the tax code yourself. Best of luck, and we hope you’ll get the most out of filing this year! For any query related to its formation and requirement. You can look over the article. Hence, For any accounting & Bookkeeping services or guidance on C corporation or S corporation, you can contact ” Autofilings“. So we are a service provider of accounting and bookkeeping all of the U.S. So, Do connect with our site, and for any query, you can give us a call.