How to Prepare Your Business for Tax Season

Entrepreneurs gearing up for tax season often find themselves overwhelmed with the myriad of tasks involved in ensuring their business’s financial readiness. As the countdown to Tax Day begins, it’s imperative to have a solid plan in place to navigate this period smoothly and effectively.

Whether you’re a seasoned entrepreneur or a newcomer to the tax season hustle, these insights will empower you to approach this annual endeavor with confidence and ease. Let’s dive in!

Stay Ready Throughout the Year

The key to a stress-free tax season is to stay prepared year-round. Keep your bookkeeping accurate, current, and ready at all times. Don’t wait until tax time to organize your finances. Think of it as ongoing training for the big event. Meeting with your tax team regularly, like our client Beth, who transitioned from feeling overwhelmed to confidently sliding into tax season, can make a significant difference.

Introduce Your Money Team

Your money team may consist of your bookkeeper, tax accountant, financial advisor, and business coach. Ensure they’re all on the same page, working together to support your business goals. At Kickstart Accounting, Inc., we prioritize collaboration among these professionals to provide comprehensive assistance to our clients.

Obtain W9s for Contractors

If you’ve paid contractors over $600, ensure you have their W9 forms. This step is crucial for issuing 1099s by the end of January, as required by the IRS.

Review Your Payroll

For S corporations, determine a reasonable salary for yourself, considering factors like your role within the business and industry standards. Review your payroll to ensure compliance with health insurance deductions, retirement contributions, and accountable plans for home office expenses.

Prepare Early

Don’t procrastinate! Schedule an appointment with your bookkeeper early to get your documents for your tax preparer and avoid last-minute rush. Make sure you’ve sent all necessary forms to your money team and consider making estimated tax payments and saving for taxes throughout the year to avoid surprises.

Next Steps

Look ahead to the next year by having a budget in place and regularly reviewing your financials. As the CEO, it’s your responsibility to stay informed about your business’s financial health and make informed decisions. Consider how you’ll manage your business over the next 12 months and whether you have the right support in place.

Don’t wait until tax season is upon you.

Start preparing now to ensure a smooth and stress-free experience. If you’re not already working with a professional team like Kickstart Accounting Inc., reach out and book a call today.

Let’s tackle tax season together and set your business up for success in the year ahead!