Things to do Before Filing your Taxes
We're nearing the end of the year, which means TAX SEASON is coming up sooner than you think! Instead of waiting until the last minute and feeling the stress of crunch time, let's get started on things now.
What to do NOW to be Ready for the End of the Year
The biggest thing you can do to be ready for the end of the year, if you haven't already, is to get a good bookkeeping system in order. Whether you put your numbers in excel, QuickBooks, or Xero, you need to have a system to keep track. You want to track your expenses like business coaches, products, supplies, anything you're purchasing FOR your business, as well as any income. There are things you can do weekly, monthly, and quarterly to help you get ready - I've even made a nice, concise list for you.
To give you a brief overview though, weekly I like to go over numbers, categorize expenses and income, etc. I like to set aside about 30 minutes for this a week. Monthly, I reconcile my bank accounts, pull my Profit & Loss and Balance Sheet and review my numbers. I compare my numbers to previous months and projections, to really see what my numbers are doing and if I want to make any adjustments. Quarterly, watch out for quarterly estimated taxes. I also review and reevaluate quarter by quarter numbers and projections.
Feeling Confident in Your Bookkeeping
First of all, there's kind of a stigma that the IRS is this big scary monster that's out to get you. But if you're doing your bookkeeping properly, and you have a trusted tax preparer helping you file, you have nothing to worry about. If the IRS does take a look at your accounts, you've checked all your boxes.
Feeling confused about what you can or can’t write off? Download our free Biz Deductions Guide and reach out if you have any questions.
How Can You Do Better Budgeting?
Going back to what I said before, it’s all about keeping track of your numbers. It’s so important to have a good system in place. One that works FOR you, that you can be consistent with. Just because it works great for other people, doesn’t necessarily mean it’ll work great for you. So find what does work and stick with it! You can always work with a bookkeeper if you want more support in this area 😉
If “budgeting” scares you, think of it as simply PLANNING. So know your numbers, and that will help you plan for your business future. One note as you budget or plan, remember to set aside 25-30% of your profit for estimated taxes, whether you pay quarterly or at the end of the year. And of course, don’t forget to pay yourself!
The best thing you can do before filing your taxes is to be keeping up with your books year round. Set aside a weekly check in where, even if it’s only five transactions, you take the 5 minutes to record and go over everything. As you do that and have a clear, accurate picture of your numbers, you’ll be able to make better projections for your future. Cheers! 🥂
