Is the cost of having your tax accountant organize your records more expensive than filing your tax return? 

What is the cost of procrastination?   

Can you afford to organize your own files?   

Before filing your business tax return or handing your details over to your tax professional, it is imperative that you consider the following 8 points of preparation.   Organize all your information in such a way that filing returns and paying taxes becomes a whole lot easier.

Carl Leaman, President, Be The Best Business

8-Point Tax Preparation Checklist

1.  Organize your data:  Consider changing your filing system from the traditional method to using file labels that reflect your tax return. This tip will greatly reduce the time needed to collect all your data and organize it in a special folder, reduce stress, improve productivity, and keep you focused on tax planning throughout the year.  Typical categories required are sales, cost of goods purchases, and expense accounts along with personal details, such as any new investments in property or stocks. Make a list of deductible expenses—money spent on training, business travel, contractors, and other business expenses.

2.  Check your exemptions:  Contact your tax accountant and ask about which tax exemptions may apply to you.  You should also ask for this information whenever you are making a new investment or significant purchase.  Don’t forget that not all states have the same tax exemptions as provided by the Internal Revenue Service.

3.  Collect your family details:  You will also need to collect your spouse’s and children’s details.  If you and your spouse have jointly invested in or sold some property, the tax implications will have to be calculated.

4.  Keep your basic information ready:  Always keep you and your family’s basic information such as social security numbers, previous years’ tax returns, driver’s license numbers, etc., on hand when you’re preparing to meet with your tax professional.

5.  Keep your mortgage or rent statements ready:  If you are receiving rent on any property, making mortgage payments on your place of business, or even paying installments on a car that you use for business, then have those account statements ready for your tax professional.

6.  Make tax planning a priority:  Remember, your tax accountant will charge more for last minute filers. Keep in constant touch with your tax accountant and ask them any questions that come up.  Nip any problems in the bud instead of letting them go and until the last moment. You need to ensure that your business returns are filed on time, every time. Do not give the IRS any reason to cast doubt on your intention to pay your taxes.

7.  Keep money ready:  Proper planning will provide time to manage the cash flow requirements needed to file your return and pay your taxes, if you have not paid enough during the year, and explore legal alternatives where you may be able reduce your tax obligation.  To make paying your taxes easier when the time comes, keep a slightly higher amount than you expect to owe in your business bank account, so that you are not late in making payments.

8.  Invest in tax-saving shelters:  If you have surplus money, then rather than paying higher taxes, you can invest that money in ways that will shelter it from taxes. Your tax professional can guide you in these matters. For example, they may be able to find ways that you can acquire an asset or make an investment and save money on your taxes at the same time. This checklist will help you file your business taxes faster – and lower your stress levels.

List of the 10 most common taxpayer mistakes according to the IRS.

Coach Carl

More business tips by Coach Carl