Sure it may feel like 2020 has just begun, but we are official in tax preparing season. Whether you are taxed as a corporation of as an individual, those deadlines are coming up soon. Whether your taxes are due in March or April, there are some winning tactics you can deploy now to make it easier than ever. We will walk you through three of our big tips for tax preparation.
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Wait... Why Start Preparing Now?
You might be thinking “taxes aren’t due for several months, why worry now?” Trust me, I get it. We’re all strapped for time, and frankly, tax preparation isn’t most people’s idea of fun. But a bit of preparation now will save you time later when you will be facing a deadline. This is especially true as tax laws have changed and made preparation a bit different in the past two years (hence our tips).
Tax Prep Tip 1: Bookkeeping and Record Keeping
Yeah, I know. This is not the fun part of the job for most people. Most small business owners don’t employ a bookkeeper. According to Accounting Today, that number is around 60%, give or take a few percent. Most of us rely on QuickBooks or something similar. It makes sense. Outsourcing is expensive when every penny count. But your time is money, too. Don’t forget our pain-free delegation tips. If this is a task to delegate, you probably should.
Tax Prep Tip 2: Deductions, deductions, which to take?
This is where record–keeping and documentation will make your life easier. Many deductions go unclaimed. In fact, according to a study by Paychex, 18% of workplace credits and deductions were missed. You can do the research on your own, but you could save yourself a lot of time and hassle by hiring a CPA. CPAs aren’t cheap. Not all of them are good. But, if you do a bit of homework and networking, you can probably find a good one with experience in your industry. Again, we go back to the delegation tips. Is this something you are best suited to solve or someone else?
Tax Prep Tip 3: If you’re not ready, file an extension
Most people get scared if they file an extension. It can be a little scary, but
According to statistics collected by the IRS regarding tax returns submitted in 2018, it’s a near even three-way split between those processed in May (20.1 million businesses), July (21.7 million) and November (24.5 million).
It’s not a great habit to form, but if you find yourself behind or need more time to get a CPA on board. Take it. Make sure you have completed steps one and two. Or, if not completed, at least, start the process. Maybe you can’t fix it for your 2019 taxes, but you will be in better shape for 2020.