Even if your small business is running smoothly otherwise–maybe even thriving–the fact that it is tax season, is enough to make any small business owner shudder. Indeed, even those business owners who have been keeping detailed records may feel overwhelmed at tax time, worried about making an error, and also looking for ways to maximize credits and deductions in order to save. But, with good tax recordkeeping and a Certified Public Accountant (CPA) on your side, you don’t have to panic. Here are some tax recordkeeping and tax-time tips to offer peace of mind and help filing this year go as smoothly as possible.
Know What Records You Need to Keep
As a business owner, it’s important that you establish a comprehensive record-keeping system for your business, and not just for tax time; keeping thorough records can be important for legal compliance, planning for the future of your business, getting a loan, and more.
When it comes to recordkeeping, more is better, and no detail is too much. Some records that you should absolutely be keeping track of, as recommended by the Small Business Administration, include:
- All licenses and permits, including your city business license
- Payroll and personnel information, such as Social Security numbers, how wages are paid, injury reports, income tax withholdings, hiring documentation, healthcare information, total wages paid, and more
- Of course, you should also keep detailed notes about all business income and expenses. This will be of particular importance during tax time.
Use Accounting Software
Even if you prefer the tried-and-true methods of record keeping (i.e. notebook and pencil), it’s time to upgrade to a good accounting software if you haven’t done so already. Accounting software can be used to track payroll, document management, inventory, and more, and when tax time comes, printing off records and handing them to your CPA is easy. And remember, while humans often make calculation errors, computers rarely do.
Keep Paper Documents and Electronic Ones
Even if your business is high-tech, chances are that some of your records are still paper-based, such as checks and receipts. It’s important that you not only hold onto these paper documents, but that you make an electronic copy of them too by scanning them into a computer file. Not only will doing this make tax time easier (all of your documents will be in one place), but it is also good protection in the event of a break-in or natural disaster, such as fire.
Reach Out to a Certified Public Accountant to Learn More about Tax Recordkeeping
Perhaps the biggest boon for small business owners at tax time is that fact that CPAs are ready to help. At Estess CPA, we specialize in accounting services for small- and medium-sized businesses throughout New Orleans. For accounting, recordkeeping, and tax services that you can count on, call our CPAs today or send us a message telling us more about how we can help you.