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6 min read

6 Ways to Prepare Your Business for Tax Season

How to Prepare Your Business for Tax Season: A Fun & Easy Checklist

Tax season may not be the most exciting time of year, but with a little preparation (and maybe some coffee), it doesn’t have to be overwhelming. Think of it as tidying up your financial house so your business can thrive. Here’s a CPA-approved checklist to make the process smooth and stress-free!

1. Organize Your Financial Records

Start by gathering all your essential documents—it’s like spring cleaning, but for your finances.

Here’s what you’ll need:

  • Bank & credit card statements
  • Payroll records
  • Cash expense receipts
  • Loan statements

Pro tip: Keep personal and business finances separate. If you don’t already have dedicated business accounts, now’s the time to open them.

 

2. Log Your Records into a Reliable System

Use QuickBooks or a similar accounting system to ensure your financial data is recorded accurately.

Pro Tip: Avoid spreadsheets when possible—they can lead to errors and missed deductions. Software like QuickBooks makes tracking expenses and maximizing tax savings much easier.

  • 3. Reconcile Your Accounts

    Think of reconciling as double-checking the puzzle pieces. Match your bank and credit card statements to your financial records and look for discrepancies. Found something off? Now’s the time to fix it.

     

    4. Review Your Profit & Loss Statement

    Review your Profit & Loss (P&L) statement carefully to ensure accuracy. Focus on key areas like:

    • Gross Sales: Do the numbers align with your records?
    • Major Costs (materials, labor, etc.): Are they reasonable compared to your sales?
    • Net Profit: This determines your tax liability, so it’s critical to get it right.

    Pro Tip: While the balance sheet is important too, it often requires professional oversight to ensure accuracy.

    5. Estimate Your Taxes

    Plan ahead by putting aside 20-30% of your net profit for taxes. This gives you a rough idea of what to expect and helps you avoid surprises.

    Pro tip: Keeping up with bookkeeping throughout the year makes estimating tax liabilities much simpler.

     

    6. Bring in the Experts

    Tax laws are complicated and ever-changing. Partnering with a CPA ensures compliance, saves time, and uncovers potential tax-saving opportunities. At Schwartz & Associates, we specialize in helping small businesses stay on top of their finances and maximize every possible advantage.

     

    Tax season doesn’t have to be daunting. With a little planning and professional support, you can approach it confidently—and even save more than expected! Ready for a smoother tax season? Contact Schwartz & Associates today.

    Let us help make this your easiest tax season yet!

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See all the blog posts and news articles written by Ling Ji of Schwartz & Associates.