Easing the Burden of Tax Preparation: A Few Tips That Can Help
Tax preparation can be a real headache for many people, especially if proper records haven’t been kept. There’s nothing quite like the stress of having to scramble around at the last minute to get all your information together and possibly finding out you don’t even have what you need. Thankfully, there are a few steps you can take to reduce your stress and make sure you’re fully prepared when tax season finally rolls around.
Keep Personal and Business Expenses Separate
While it may be tempting to use your personal bank account to save time or money, particularly when you’re first starting out in business and don’t have wads of cash flowing in yet, combining business and personal expenses is generally frowned upon by the IRS. Making a clear distinction between your personal and business finances goes a long way in keeping things simple for both you and anyone who may be doing your tax preparation for you. It’s worth opening a business account just to save the time and hassle of having to detangle your finances later on.
Keep Good Records from the Beginning
Good record keeping is essential to being prepared for tax season. It doesn’t matter what type of business you’re running, keeping an accurate record of all your financial transactions from the beginning saves you the stress of having to do it all at once when it comes time to report it. There are many ways to keep good records, including purchasing special software, using spreadsheets, or even by hand. The main thing is that they be accurate and reliable so you don’t have to guess about the numbers at the end of the year. As your business grows, your record-keeping methods will likely grow with it, but starting out with something as simple as a spreadsheet can help take the headaches out of tax season.
File as Early as Possible
Waiting until the last minute to file results in a lot of fretting that could have been avoided by filing early. If you have a tendency to procrastinate in this area, make it a point to file as early as possible so you won’t get caught up in the mad rush to get everything in right before the deadline. Set goals for getting everything prepared and mark dates on your calendar.
Proper preparation goes a long way in taking the stress out of one of the most dreaded times of the year. Make your life easier by implementing simple strategies that take the hassle out of your tax preparation time so you can have more time to focus on actually running your business.