When you are the owner of a a small business, you are going to have to deal with taxes. This can be a very stressful prospect, especially if you are used to filing your taxes yourself with a single W-2 form. In order to deal with the stress, you want to take some steps now to start getting ready for tax season. Here are some ways that you can get ready for tax season in order to make preparing your taxes go as smoothly as possible.
1. Take the Time to Mark Deductible Transactions on Your Bank Statement Every Month
First, sign up for online banking. Try to get an account for small businesses, as opposed to a regular personal account because it will have additional functionality, such as being able to mark transactions with certain tags. Talk to your bank for more information. Once you have online banking set up, you can then begin getting in the habit of marking all of the transactions that you completed through your bank as tax deductible or not. You want to do this each month, as opposed to once during tax season in order to make sure that you remember which transactions are tax deductible, as well as a brief note with regards to what they were for. This will help you easily add up the amount that you can deduct during tax season and allow you to budget to pay your taxes. You want to use online banking in order to have constant access to your full list of transactions each month without having to contact your bank. If you can't mark transactions online, print out your transaction history and do so with a pen or a highlighter.
2. Store Receipts Online
Get a mobile app so you can take a picture of your receipts and then store them online. Do this every time to buy something that could be tax deductible. During the same week when you mark all of your online transactions on your bank card, file your receipts into different categories and by month so that you will be able to easily file your taxes at the end of the year.
3. Keep Physical Copies Of Your Electronic Records or Back Them Up Online
Store your electronic transaction history and collection of receipts in a cloud or print out copies of each of them and put them in a safe place. Better yet, do both in order to be sure that you will always have copies of these records even if disaster should strike.
For more information, talk to a company that helps small businesses prepare their taxes, such as Wiggins, Smit, Burby, Reineke, & Company P.A.