7 Tips to Start Preparing Your Small Business for Tax Season
Tax season will be here before you know it, but don’t wait
until then to start preparing. If you wait until tax season starts, you’ll be
scrambling and hoping you have everything you need. If you start preparing at
the end of the calendar year, however, you’ll be ready and can rest easy during
tax season. Keep reading to learn seven tips for preparing your small business
for tax season.
1. Review your books
Look at your financial statements to ensure everything is in
order and that there are no surprises. If someone else handles your records,
schedule an appoint with them to go over everything.
2. Review your bank statements regularly
When you get a new bank statement, don’t just throw it in a
pile to look at eventually. Instead,
review the report to make sure you can account for every transaction. If you
don’t know what a transaction is, it’s easier to figure it out soon after it
hits your bank, instead of three months from now.
3. Track everything
If you haven’t been tracking every expense and every
business mile driven, start now! It’s better to begin tracking late than not to
track at all.
Before the end of the year, check with your employees and independent
contractors to make sure you have everything you need to file Forms W-2 and
1099-MISC. You’ll need things like their address and their Social Security Number
(SSN) or taxpayer identification number (TIN).
5. Know what forms to file
Make sure you know what forms you’ll need to file.
If you paid employees during the year, you’ll
If you had any contractors, you’ll file
You’ll also have to file income tax returns for your business. Your business entity type will dictate which form you need to complete. Learn more about income tax forms for small businesses.
6. Put due dates on your calendar
April 15 is probably permanently stuck in your head, but not
every form is due on that date. Before tax season starts, make sure you know
when each form is due, so you’re not caught off guard.
Each contributor on the Workful Editorial Team holds an advanced degree in business-related studies and/or communication and has written for other small business publications, including SmallBizDaily, HR.com, and Business.com. The information in this article is based on thorough research and has been edited for accuracy and timeliness by Workful’s Human Resources experts. While this blog is meant to inform and educate small business owners, it is not intended to provide legal, financial, accounting, or tax advice.