Taxes – Are Your Books Ready?
The deadline is not until April 15th, but the time is going to go by very quickly – are you ready? Here are a few tips for getting ready and what you need to do now:
- Gather all of your business receipts and records for the year. At the very least you should be doing this on a monthly basis.
- Update your accounting/bookkeeping system.
- Reconcile your bank accounts and credit card statements through December 31. By reconciling your accounts then you know that you entered everything in your bookkeeping system. This should be a monthly process. You should keep copies of your reconciliations and statements.
- Get the following items ready:
- Mileage log of business miles driven during the year
- Listing of major purchases made during the year (a “fixed assets” listing). This would include any purchases of computers, software, equipment, and furniture. Typically you would include items over $500 dollars.
- The amount of individual health insurance premiums you paid during the year.
- The amount of meals and entertainment expenses you incurred during the year.
- The amount of estimated tax payments you made during the year and the dates you paid them.
- Be sure that you have everything ready for your tax professiona as early as possible. The earlier you get it to them the better. Remember that your tax professional may have hundreds of returns to prepare and the longer you wait the longer it will take them to get your return ready because they are so busy doing other people’s returns. If you wait until April, chances are your tax return will be extended.
Schedule time on your calendar now to work on these items and decide now what your deadline is to get your books and records ready for tax season. If this process is painful for you, remember that it’s easier to file your business records and update your accounting and bookkeeping system on at least a monthly basis. If you stick to a regular schedule then next year at this time you’ll be ready for tax season.