Your books have been reconciled and payroll tax forms (W2s and 1099s) submitted. Raise your hand if you’re having fun yet!
As the beginning of the year kicks off for small business owners, it’s time to look forward to finalizing tax preparation efforts from the year prior. This means, whether you’re handling the filing yourself or putting it in the hands of a trusted CPA, the month ahead will likely bring one of two reactions.
Please, no. Anything but this.
Done! That was easy.
All too often, we encounter the former; entrepreneurs and solopreneurs, who absolutely dread the first two months of any new year. For one to two weeks straight, they sit locked in an office, filtering through every invoice and receipt. They stress at the last minute over work that could’ve been organized over the span of the previous 12 months, instead of spending time on what really matters for their business: increasing revenue and strengthening client relationships.
What if we told you that this one to two week period of stress could actually be condensed to a single hour of ease? Here’s how to approach filing as a small business come tax time.
Create Your CPA Tax Package
Whether you’re handling the actual filing yourself or putting it in the hands of a third party, you’ll want to create a “tax package” by February 15th at the latest.
Start by generating requested financial reports, or make sure your accountant has access to your QuickBooks file. Next, you’ll want to consolidate year-end statements for credit cards, bank accounts, lines of credits and loans, in addition to payroll journals, 1099s and W2. This will allow your CPA to double check against reconciliations done in December.
If you’ve kept good records over the last year, this step should be pretty painless. Having the right online tools at your disposal also makes a big difference. In addition to QuickBooks, consider something like Hubdoc that will automatically pull year-end statements for download. Or bring on a bookkeeper to coach you through the process.
Answer Your CPA’s Questions
Once you’ve submitted your CPA tax package, it’s time to answer any outlying questions about the numbers. There might be expenses to double check or entries in QuickBooks that seem a bit off. Whatever it is, at Officeheads, we like to say that a good bookkeeper will receive five questions or less from the CPA because strategic decisions have been made with those numbers every day that goes by!.
Keep Tabs on the Filing Process
If your CPA is filing for you, you’ll want to keep tabs on the process. Make sure you’re submitting any last minute requested documents and bits of data in a timely manner.
Get a Copy of Your Tax Return
When it’s all said and done, everything documented on your tax return should be mirrored in QuickBooks. Get a copy of your tax return, make all adjusting journal entries (or have your CPA make this happen) then file it away digitally, so it can be easily surfaced and referenced as part of your businesses’ financial history at any point in time.
If tax season has you and your small business in a tizzy this year, it’s time to embrace the perks of well-developed financial processes. Contact the Officeheads team today for a free consultation!