If you own a small business, you know that you need to make sure your tax duties are done quickly and efficiently for 2020. As taxes can be overwhelming, you find yourself scratching your head and being as anxious as ever. But don’t worry, we’ve put together a tax checklist for you to make sure you’re prepared for tax season.
So the new year has come and you want to complete your tax obligations before the deadlines – and ideally, as early as possible. So here is what you have to do to make sure you are on the right track:
1. Memorize The Deadlines
How will you meet the deadlines if you do not memorize them? Make sure you know the following deadlines:
W-2 and 1099-MISC forms must be distributed by January 31st
March 15 is the deadline for S-corporations as well as partnerships; April 15 is the last day for sole proprietorships, LLCs, and C-Corporations
October 15 is the deadline for extension returns
Check off these dates once you have filed returns. Ideally, you will want to submit returns prior to these dates.
2. Keep Records At Hand – and Make Sure They Are Organized
One of the reasons why people find tax season stressful is that they are scurrying to look for the documentation they need. So make sure beforehand that you have your documentation stored safely in a place where they can always be easily accessed.
A great tip is to scan your documents to have a digital copy as well. Documentation needed for your returns include income statements, pay stubs, accounting documents, and possibly tax returns from previous years.
As a side note, make sure that your bookkeeping is always done properly – so that there are no issues in understanding your accounts when looking at them.
3. What Can You Deduct?
It is seldom that you meet a business owner who is trying to pay as much tax as possible. You want to minimize your taxes and possibly get a high tax return. You want to keep records throughout the year of what can be deducted from your taxes. Possible deductions can include transportation, office equipment, and travel, among others. Keep an organized spreadsheet of your deductions.
4. Don’t Forget About Your Staff
Just as your business has tax returns, so do the people who work for it. Make sure that you provide your employees, contractors, temp workers etc. with their tax forms at the appropriate time. As discussed in Point #1, you should provide them with their documentation as early as is possible – so that they can file their returns as early as possible.
5. Consult With Your Accountant
This is crucial. While you may know the basics of taxes, your accountant knows more. They will be able to spot deductions which you may not know about – health insurance premiums for example. They will tell you to keep track of assets sold and bought throughout the year. They will know the tax laws in and out and will ensure the best option for you. They can also advise you on how to manage and track your books to be prepared ahead of time.
Now that you have our tax checklist, why not print it out and cross off each point as you go through it? All the best for this year!
Looking for bookkeeping services to take the stress off for next year? Contact us today to learn more!