Organizing Your Finances for Tax Season
As a business owner, few things feel as daunting as preparing for tax season. Whether you’re working on this year’s taxes or getting started for next year, creating the habit of organization is well worth the effort. Even if you delegate this work to someone else, taking time to do your ‘homework’ is valuable, because organizing your finances is an essential step to maintaining your money without losing control. You’ll save time and feel far more confident in what you can do with your money. Plus, it makes tax season a heck of a lot easier to get through. Let’s look at some tips that simplify the process.
Separate your personal and business expenses
It always seems easier in the moment than it is in a few days or weeks to remember exactly where your money is going. Keeping your expenses organized into distinct categories (and bank accounts) makes remembering a lot easier. Plus, it helps at tax time because documents are much easier to gather this way.
Bookkeeping for your business expenses
Make sure that your business expenses and deductions are balanced throughout the year. There are many tax deductions that your business may be eligible for, and hiring an expert to help with bookkeeping and tax prep is both a time-saver and money-finder.
Take ownership of the process
Organizing isn’t always fun, but managing your money while you build your business can be both a motivator and a warning of things gone astray. The more you know about what’s coming in (and going out), the more you can be proactive instead of reactive. Don’t be afraid to dive in and study your statements or other materials.
Use a year-round approach
Tax time may be once a year, but your money is active every single day. If you’re finding yourself overwhelmed this tax season, consider this your chance to get started now on next year’s process. Organizing your finances can be a daily or weekly process, and your future self will thank you for it.
Consider resources built to help you out
Today’s technology offers a wide range of virtual options that make easier work out of complicated tasks. Investing in a financial accounting package like Quickbooks can save you time, effort, and stress when organizing your money. Work smarter, not harder! I really enjoy Quickbooks and recommend it to anyone looking for a simpler way. Clients that sign up for QB through my business get a 30% discount on their monthly subscription. Just contact me here, and I can sign you up for the automatic discount.
The bottom line on preparing for tax season
Organizing your money gets a lot easier the more you do it. Developing a system that works for you may involve trial-and-error, but it will benefit you every year at tax time. Delegating your money management needs to a qualified professional can free up a lot of your time and add additional strength to your business.
If you’re looking for a virtual CFO to help with bookkeeping and financial analysis to help you organize your business finances, reach out to Cotner Professionals anytime.