Ready or not… here it comes! Tax deadline season is more than officially upon us. If you’re a multi-member LLC, partnership, or S-corp, your deadline is next week!!! AKA March 15th! If you’re a C-Corp or a self-employed sole proprietor, or just a regular human filing personal taxes, your deadline is April 15th! And while we don’t ever advocate procrastinating, an extension is always an option. Extensions will buy you time till September 15th or October 15th, respectively.
So, are you ready?
Well, if you were me (Taylor) 5 years ago and you asked me that question, I’d have responded with “Um, how do I know if I’m ready?” So, for any novices out there, that’s what we’re going to dig into today. How do you know if you’re ready to file your taxes?
Well, first things first…
Is your accounting file up to date? Have you reconciled your bank and credit card transactions? What about your payroll liabilities? Have you recorded your loan interest? If any of these questions are creating question marks in your brain or raising your blood pressure, time to double down on your books. Or it’s time to call in a team to help. That’s where we come in for our clients. All those things are included or at least addressed, in our bookkeeping services. If you don’t have a bookkeeping team, make sure your tax preparer is giving your financials a second eye for these types of things.
Next…
Do you have a tax preparer selected? Or are you going rogue, aka DIY? Either way, you want to know the answer by this stage. If you are working with a tax preparer, hopefully you know who that is. Unfortunately, as in most things in life, not all tax preparers are created equal. You’re going to want to interview this person and make sure they are a good fit for your business and/or you, personally, and that they share your ethics. Quick story, when I first started my apparel business, my business partner and I were interviewing CPAs and we met with one that told us to go “schmooze at the club” and just charge it to our business as a write off… we both couldn’t get out of that dude’s office fast enough! So, make sure you interview these people and ask them how they would handle different situations, trust your gut, you’ll know when it’s a good fit.
If you’re going the DIY route...
There are plenty of user-friendly online software-as-a-service (SaaS) programs out there, including Intuit’s Turbo Tax which will connect to your QuickBooks Online file if you’re a QBO user. Now, keep in mind that it still requires you to have a general understanding of taxes, deductions, etc. – but the system does a pretty good job of walking you through the steps. It’s like having a GPS for your tax prep journey – you still have to drive the car, but at least you won’t get lost.
What about deductions?
Deductions are the hidden gems of tax filing, but you have to know where to start digging. This is where a great tax preparer’s weight in gold really shines through, especially if you are the business owner. Knowing if you are eligible to take the home office deduction, health insurance premium deductions, vehicle use deductions, etc. can save you a lot of dollar bills at tax time… but that’s just the thing, you have to know if you can take them. If you don’t, seek out that knowledge from a reliable source.
If your blood pressure has continued to rise while reading this or you have now officially broken out in a cold sweat, remember that extensions exist for a reason. BUT - an extension is not an extension to pay any taxes owed. So, if you owe money to Uncle Sam, he still requires you to pay up by the original due date. And if you don’t? Well, think of it as an overdue library book. You can keep it for now, but those late fees (and interest) will start to accumulate until you hand over what’s his.
Another word to the wise re: extensions… if you do file an extension, don’t put your tax prep on the backburner until August or September, you’ll find yourself in the same boat and no closer to the shore. Instead, carve out time to get it wrapped up well before the deadline, if possible. Block time on your calendar now to find a team to help you clean up your books (cough, cough, we’ll do that!), find your valued tax preparer (sneeze, sneeze, we can recommend some trusted teams), or do it yourself! And if you need some help on time blocking → check out this blog.
So, last but definitely not least – to ensure you’re ready for tax time, you can revisit our January blog post that did a deep dive into year-end financial prep. We even made our handy dandy year-end checklist available to you as a PDF download. (Click here to get a copy!) But keep in mind that a lot of these tips and tricks referenced are not just one-time actions, but can be implemented as ongoing strategies to keep your financial health in check all year long! Regularly reviewing accounts, ensuring accurate payroll records, and maintaining thorough documentation are not just good habits; they're your financial lifelines. Think of them as your business's daily vitamins – they might not be exciting, but they keep things running smoothly.
As we wrap up this blog, remember that tax time isn't just about meeting deadlines and crunching numbers. It's a chance to do a wellness check on your business's financial health. Once you’re done, don’t forget to set aside some time to reflect, plan, and strategize for the year ahead based on what you learned. And if you ever feel lost, our team at Accounting Therapy is here to guide you through the maze of numbers and prep work. We can even act as the interpreter between you and your tax preparer (because we know sometimes those are necessary)!
So, are you ready for tax time? Hopefully that answer is a “Heck yeah!” If it’s not, give us a call!
And until our next financial adventure, keep those books balanced, and don't let the tax season blues get you down.😊 We're here for you, every step of the way!
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