It’s that time of year when we gather up our tax-related documents and either go it alone or meet with our trusty CPA.
Either way, preparation is the name of the game. So here are our tips for smooth sailing this tax season and throughout the year.
1. Know what you can deduct.
Understanding what you can deduct on your taxes is essential to good bookkeeping. And, though it varies for every business, here’s a list of expenses that you might want to compile before meeting with your tax professional:
You can learn more about business deductions on the IRS website. The key is to keep detailed records, including receipts complete with notes indicating the business purpose for each expense.
2. Use bookkeeping software.
If you want to put in the work, you can keep track of your business expenses using a simple spreadsheet. However, bookkeeping software can greatly simplify the process and give you access to automatic reports that reveal how your business is doing at-a-glance (i.e. no heavy number-crunching necessary). Here are two bookkeeping services that have historically worked well for sellers on eBay:
3. Spend more time organizing your finances.
If you ended the year with a shoe-box full of random receipts, consider taking a little time every week, going forward, to organize your office and business-related paperwork. Instead of posting what you had for lunch on Facebook, use this time to file paperwork or investigate ways to streamline your record-keeping practice. For example, you might want to consider a service like Shoeboxed or Neat to scan, organize, and generally keep track of important documents.
The upside of having a weekly (if not daily) date with your business finances is two-fold: not only will it be easier to find what you need at tax time, but you’ll have a much better outlook on the health of your business as a whole.
And, although it’s our goal to help you get prepared, we also recommend that you have a trusted local tax professional on your side to ensure that you’re taking advantage of available opportunities, and keeping well within the guidelines of the ever-changing, ultra-complex business tax laws.
Have some tax-time tips of you own? Let us know in the comments below.
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