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Preparing for Tax Time
If you have a bookkeeper or you maintain your financial records using accounting software such as QuickBooks, tax preparation is as simple as providing your accountant with a copy of your QuickBooks file. If not, you have your work cut out for you. The key to tax preparation is organization. Being organized will reduce stress and save you time and money and ensure that you get all the deductions that you are entitled to. So, where do you start?
First, gather the following: bank statements, merchant statements, credit card statements, invoices, purchase orders, sales receipts, expense receipts, tax remittance forms and any data related to employee expenses.
Next, organize your records by month separating them into two main categories: income and expenses. The more organized your information is the less time your tax preparer will have to spend trying to decipher information. If they charge on an hourly basis, being organized will greatly reduce your fee.
Then, sort through your records and separate them by month and type. For example, under the expense category you might have advertising, office supplies, utilities, labor, and taxes to name a few.
Finally, if you are preparing your taxes by yourself select appropriate tax software based on your business type. If you are hiring a professional, seek out a tax preparer that understands your business and can provide sound advice. Click here for helpful tips on how to choose a tax preparer.