By Shea Eckert
As we enter the last month of the year, it’s a magical holiday season for many, but for SMB owners, it’s also leading to the most dreaded – tax season! Tax season can be highly stressful if you do not prepare properly and stay organized throughout the year. Procrastination in this area is not your friend! If you take the initiative to keep your tax documents organized and safe now, you will have a more peaceful and efficient tax filing process.
Here are five simple things you can do to prepare for the upcoming tax season:
1. Actively Organize Your Receipts
Everyone knows that receipts are small pieces of paper that tend to pile up on you as the year wears onward. If you take the initiative to organize your receipts as you get them, you will save a lot of time when it comes to filing your taxes. You can manage your receipts by labeling them or sorting them, either into categories or chronologically. Once your receipts are organized, you should aim to store them in either a manila folder or box to avoid them getting lost. You can also electronically receive and store receipts and manually scan them once paper receipts are compiled.
2. Use Spreadsheets
If your business donates items to charities, you will claim them for a tax deduction when filing tax returns. It is helpful to set up a spreadsheet that will keep track of all your donation information for your tax return. Making a spreadsheet will keep all your data stored in one place and make it easily shareable.
3. Make Folders
When you receive tax documents, you must keep them together to avoid them getting lost. You should use a manila folder or box to keep all your tax documents in and store them where they will not get lost. Documents you may want to put in your folder may include your salary, income or investment documents. Again, the more you can move this process to digitally storing, the more organized and efficient you will be. Additionally, you are being sensitive to the environment and not wasting paper!
4. Declutter Your Documents
It is vital to declutter your documents and workspace before you begin filing your taxes. Decluttering your papers can consist of you shredding unneeded documents or placing them in a file elsewhere. Organizing your workspace to have a clean desk when it is time to prepare the returns will also be a big help.
5. Schedule Time to File Your Taxes
This is an essential part of preparing for tax season, so be sure not to procrastinate. With strict deadlines and lengthy processes, it is crucial to get a head start on filing your taxes. We recommend scheduling time into your calendar that can be used strictly for filing your taxes so you do not fall behind.
Tax season will be here before we know it. If you prefer to file your SMB’s tax returns yourself, keep these tips in mind to ensure a smooth process. Even if you are having your returns prepared, many of these tips are also helpful to you and your accountant.