Here are our recommendations for things that you can do year round that will help come tax time.
- Open a separate bank account for your business activity: If you’re self-employed, this will greatly minimize confusion at tax time by giving you just one place to look for your business transactions. Same is true for credit cards, have one for business and one for personal
- Reconcile your accounts once every week or month: In March you won’t remember what that receipt from January was for, so reconcile your accounts once a month even if you hate it, just so that you can make sure you’ve included everything.
- Use tax categories when you classify transactions. If you know what kinds of income or expenses you’re doing, filing them when they happen makes them much easier and faster to find come tax time. You can look at your previous year’s tax return or talk to your accountant to learn what they are.
- Keep Receipts! Of course this is on the list, and you should know that accountants always will try to make this stick. Keep your receipts! They’re important! Really!
- Use an app. There are a few apps that you can use to keep track of receipts and business expenses. Find one that works for you and use it, and it can make expense reports and tax reports much easier to create and hand off to your accountant.
- Have an accountant. If you’ve got even a moderately complicated business, have an accountant that you can ask questions of throughout the year, especially before something big could happen or just after something does.
That last item isn’t self-serving; even if you don’t choose Tardy & Co., PC it is excellent advice to have an accountant.
Making something part of your routine is a great way to make sure you get the things you need done. Forgetting these things are great ways to create headaches for yourself at tax time. So start doing these things today, then try to keep it going tomorrow. Get an App, start a drawer for your receipts, whatever works best for you, your business, and your life.