6 Ways to Dread Tax Season a Little Less
BY: LUCINDA HONEYCUTT ON TUESDAY, MARCH 01, 2016
As a business owner, you should be familiar with maintaining accurate, detailed, and current financial records. If you struggle with keeping books as well as you should, there are many ways you can get organized to make your tax season less stressful for you and your accountant.
In a world where nearly everything is digitized, and the IRS has the freedom to demand receipts for anything you claim, it can be a hassle to keep paper copies of Every. Single. Receipt. If the idea of filling your office with little pieces of paper drives you nuts, there are a number of apps available to help you capture receipts digitally for safe keeping, so you have everything you need when you’re ready to file.
Shoeboxed offers a service to help you scan and organize receipts and business cards, so you can easily create expense reports, and even track mileage. You can use the app to scan everything yourself with your smartphone’s camera, or with a paid subscription, you can use prepaid envelopes to mail in your paper receipts to have them digitized for you.
Expensify offers an expense report system for teams, and makes it easy to reimburse online. It integrates with QuickBooks, too.
Certify is a free cloud-based app for tracking your receipts. You can access it through the web or a mobile app, available for Android, iPhone, Windows Phone, and Blackberry.
(Almost) Automated Accounting
QuickBooks Online offers nearly automated accounting. Connect all your bank accounts, and it will continuously add all the transactions to the system for you, so there’s no hassle of manual entry. You will have to pop in from time to time to categorize everything, though. But, if you have a lot of transactions that are the same, such as PayPal™ fees, you can create rules to automatically categorize transactions as they come in. There’s a self-employed version designed to help make it easy to separate personal and business expenses.
Meet with an Accountant Ahead of Filing Deadlines
The worst thing you can do is wait until April 15th to start working on your taxes. Schedule a meeting with your accountant ahead of time so you can be sure you’re getting everything in order. If you keep track of things yourself throughout the year and don’t have an accountant, it’s still a good idea to find one to consult with, to make sure you’re not missing out on credits and deductions that could save you money. You should, if you’re not already, be filing on a quarterly basis. To keep things on track to make your annual filing easier, consider meeting with an accountant every quarter.
Integrate Your CRM
Your CRM can integrate with a number of financial tools you’re already using, like QuickBooks, to keep your data centralized in one location for easy management. Does your business accept payments with PayPal? Integrate it with QuickBooks, then connect your account to your CRM, and you cut out the hassle of having to maintain records in separate accounts.
Plan Ahead to Avoid Penalties
Save a portion of each payment that comes into your business for your quarterly taxes, then make payments every quarter. If you wait to file once a year, you run the risk of owing underpayment penalties. And unless you’re taking a loss for the year, you’ll owe taxes. Without savings, you may find yourself scrambling to pay your tax bill, or filing after the deadline, and paying even more penalties for being late. If you can’t pay what you owe, file anyway. You may be able to reduce your debt with an offer in compromise.
Commit to a Plan for 2016 and Beyond
Once you find a system that works well for you, commit to sticking to it for the rest of the year. It’ll make filing in 2017 much less stressful. Evaluate your progress each quarter, and make adjustments to your processes to keep them as simple, yet accurate, as possible.
No matter how stressed out taxes may be making you this season, it’s never too late to get yourself on the right track. Tackle it a bit at a time, and before you know it, you’ll have a system that works for you.
Image via Shutterstock