Before filing your business tax return or handing your details over to your tax professional, it is imperative that you organize all your information in such a way that filing returns and paying taxes becomes a whole lot easier.
Here are 12 things to do before you call your tax professional.
- 1. Organize your data: Collect all your data and organize it in a special folder. Gather your sales, purchase, and expense figures along with personal details, such as any new investments in property or stocks.
- 2. Check your exemptions: Contact your CPA and ask about which tax exemptions may apply to you. You should also ask for this information whenever you are making a new investment or significant purchase.
- 3. Collect your family details: You will also need to collect your spouse’s and children’s details. If you and your spouse have jointly invested in or sold some property, the tax implications will have to be calculated.
- 4. Create a system: If you have had prior experience in getting your taxes done, then devise a system by referring to your previous years’ experience. You can then collect all the data according to what you know your tax professional will ask for.
- 5. Keep money ready: Along with your returns, you will also have to pay your taxes, if you have not paid enough during the year. To make paying your taxes easier when the time comes, keep a slightly higher amount than you expect to owe in your business bank account, so that you are not late in making payments.
- 6. Keep in touch with your tax professional: Keep in constant touch with your tax professional and ask them any questions that come up. Nip any problems in the bud instead of letting them go and until the last moment.
- 7. Check for alternatives: Consult your tax professional or other reliable professional to explore legal alternatives where you may be able reduce your tax obligation.
- 8. Make tax planning a priority: Do not keep your taxes on the back burner. Give them top priority. You need to ensure that your business’ returns are filed on time, every time. Do not give the IRS any reason to cast doubt on your intention to pay your taxes.
9. Invest in tax-saving shelters: If you have surplus money, then rather than paying higher taxes, you can invest that money in ways that will shelter it from taxes. Your tax professional can guide you in these matters.
For example, they may be able to find ways that you can acquire an asset or make an investment and save money on your taxes at the same time.
- 10. Make a list of deductible expenses: Make a list of deductible expenses–money spent on training, business travel, contractors, and other business expenses.
- 11. Keep your mortgage or rent statements ready: If you are receiving rent on any property, making mortgage payments on your place of business, or even paying installments on a car that you use for business, then have those account statements ready for your tax professional.
- 12. Keep your basic information ready: Always keep you and your family’s basic information such as social security numbers, previous years’ tax returns, driver’s license numbers, etc., on hand when you’re preparing to meet with your tax professional.
This checklist will help you file your business taxes faster – and lower your stress levels.