Good day to everyone. It’s your friendly, neighborhood accountant here to share some tips to get through you the tax season.
I know that tax season can be stressful for a lot of people. Each year the IRS makes it easier and easier for us (pun intended) for us to understand our very complex tax code by adding new laws and taking laws away. Tax time can be especially stressful for my risk-taking small business owner visionaries who usually have very little time to run to the rest room than to sit at the computer glaring at a tax return. I understand the struggle, believe me I do. Thank goodness we are in this together. I know that preparing for tax season may seem like a cold, endless road going nowhere.
Here are my top 5 things to know for a successful tax year.
- Make sure your records are in order and easy to understand.
It is so important that throughout the year, you are keeping good records. If you have an accountant, please make sure that you are sending them your information on a regular basis AND they are recording your transactions in a timely manner. For those of you who are still managing own books, don’t fret. Something as simple as an Excel spreadsheet can make all the difference. Recording your sales and expenses throughout the month, each month and in your Excel spreadsheet helps your tax preparer AND may save you a few bucks, considering the time it takes for the tax preparer to do this prep work on his own. Just make sure that you have your paper copies of your transactions for backup for the transactions that you have recorded in the spreadsheet, just in case your tax preparer has any questions.
- Understanding the mandates of the Affordable Care Act.
Do you have less than 50 employees? Have no fear; you are under the threshold for receiving penalties for lack of health insurance for your employees. Do you have over 50 employees? If so, you may be subject to penalties if you do not offer your employees health insurance or if the health insurance is deemed unaffordable and does not provide minimum value. More information about the Affordable Care Act can be found here.
- Don’t leave anything behind.
I know many of my clients do not bring all of their tax forms because they feel that they do not need them. If you received anything in the mail that has end of year cumulative information on it (like a mortgage statement or a bank statement) take it to the person who prepares your taxes! Just because something looks insignificant doesn’t mean that it is. I would rather you take more than enough paperwork than not enough. There are few things more stressful than the one handling your tax return to ask for that piece of seemingly insignificant mail that you may have given to the dog. Save yourself the stress. Take it all.
- Keep track of all the estimated taxes you paid.
Although, this information should be a part of your spreadsheet we discussed earlier or recorded in your QuickBooks or Xero software, I thought that it needed a separate mention. Make sure that you have all of your records that you have paid your estimated quarterly taxes throughout the year. Your tax preparer will need this information to calculate your return due (or refund).
- Know your deadlines!
I understand that this may be a drop in the hat for some, but I still want to make this clear. This year, the tax season ends April 18, 2016. This is due to Friday, April 15, being Emancipation Day in Washington, D.C. That holiday will push the filing deadline to the following Monday, April 18 2016. So, if you do not think that you will have enough time to gather all of your information to prepare your taxes, you can always get an extension of time on filing your tax returns. Keep in mind that your tax preparer can submit your extension electronically but you must let them know of your decision. That means that your tax return must be submitted by October 17, 2016.
On a personal note, if you feel that this tax season is overbearing, try a breathing technique called the 4-7-8. Sometimes a steady breath will combat the worst of stress and anxiety.
As always, I am always here to help you guys in any way I can.