Were you prepared for tax season?
When you begin your annual tax preparation and filing marathon, it’s supposed to be an orderly process that takes 21 hours total. That’s what the IRS Form 1040 Instructions. That tax preparation estimate includes tax planning, record keeping, forms completion, and a category the IRS calls “All Other.”
If you struggled with your business tax records this year, fooled around with last-minute tax preparation, and rushed to make the final postal pickup on tax day, you probably don’t agree with that estimate. You certainly won’t agree with those stats if you struggled for weeks to get your tax preparation done then threw your hands up in the air, gave up, and filed a last-minute extension.
Tax preparation is hard and time-consuming, and it certainly takes more than 21 hours. Especially if you’re not prepared or perhaps the phrase should be pre-prepared
It all about pre-preparation
To get your annual taxes done and get back to running your business, it takes diligent record keeping and planning…ahead of time. When you fail to pre-prepare for tax season, you can derail the tax preparation and filing process long before tax day. Each business taxpayer has their own way of preparing?or not preparing?throughout the year. While few entrepreneurs toss crumpled receipts into old shoe boxes these days, some sabotage the process in other ways.
Some business owners delay record keeping for long periods until it’s impossible to get back on track before tax preparation time. In his SCORE article “4 Ways to Stay Focused on Taxes All Year,” Anjum Tunuli, a Financial Services Tax Officer, calls this the “Summer Slide.” He compares a failure to keep business records current to a school kid losing academic ground over summer vacation. In either case, it’s hard to catch up.
No one can blame you if you put off record keeping. You have to run your business after all. But if that means a mad dash to gather, organize, and categorize months of invoices at the last minute, you’re likely to delay filing your business return and that can mean tax penalties.
Sometimes you just need help
The problem with tax preparation is that it’s a year-long pre-preparation process that places an ongoing burden on your time. As a small business owner, you have to make conscious time management choices to keep your business up and running. Sometimes you have no choice but to postpone critical record keeping tasks to make sales or help customers. The bottom line: if you can’t keep up with everything, you need help.
If you’re already wearing multiple hats, you probably don’t have the cash to pay a bookkeeper or accountant. Accounting software is a less costly option, but that takes effort as well. You have to set up your accounts correctly, develop a system for categorizing your receipts and invoices, track your cash flow, reconcile your financial records, and a whole lot more. Fortunately, technology makes it possible to get the professional back-office help you need at a reasonable price.
Let Us Help
Goode Bookkeeping and Consulting provide bookkeeping, payroll, cash management, and a host of back-office and consulting services. We set up a secure cloud-based account and take care of the details while you run your business.
We work with the latest accounting software to keep your business financial records organized and updated. We do the tedious pre-preparation work and when it’s tax preparation time again, you’ll be prepared with income statements, balance sheets, cash flow reports and other financial information in clear, easy to read formats.