Taxes, even for large companies, can cause a lot of confusion and frustration which sometimes leads to incorrect or longer tax preparation. According to a survey conducted by the National Small Business Association, 50 percent of small businesses in the United States spend more than 40 hours per year managing their federal taxes.
With this kind of problem many businesses and companies face, here are 4 strategies that will help you prepare your taxes much easier and less hassle for the tax season.
4 Best strategies to Prepare Tax
1. Find a financial expert
Ofcourse, you want all you financial management work, especially tax preparation to go smooth and accurate as possible. A financial advisor will be a great help since she knows the ins and outs of financial business and may help you improve your financial strategies for the year. You can also consider outsourced CFO services, which provides accounting experts that can help you manage your entire financial management.
2. Use of Technology
In this computer age, using technology such as softwares and applications can be a real time life saver in tax preparation. Tools like Quickbooks, Xero or TaxJar can help you in breaking down your business’s expenses and also helps you understand how much you can deduct based on the amount of money you’ve spent. IRS2Go is also a must-have software since it helps you search for quick tax information and calculate taxable income for different filing statuses.
Aside from saving you from a longer tax preparation, it could actually save you money.
3. Scan your receipts
Aside from keeping the hard-copies of your receipts, make sure to scan them and have a file storage of all of your receipts in your computer. Faded and torn receipts may cause you a lot of trouble when it’s time for monitoring your expenses, especially when you need to figure your deductions.
Aside from scanning, you can also take a photo of your receipt once you purchased something. This soft-copies of receipts acts also as a backup in case your hard-copies get lost. You can also use Wave Accounting, a helpful accounting application which offers receipt input option.
4. Set aside funds
To avoid the possibility of having to drain your bank account due to surprise of a great tax bill, set aside funds for tax payments ahead of time. A helpful application is Qapital, which connects your checking account to an FDIC-insured account. All you need to do is select the percentage of your income you want to set aside for quarterly tax payments, and the app automatically transfers money from your checking account to your FDIC account. You can also use the FDIC account when it’s time to pay your quarterly taxes.
Tax preparation is one of the important things to do when you have a business, no matter what size it is. A correct and timely tax preparation will surely help a lot to improve your financial management and at the same time the growth of your business.