We asked our clients “What would you have done differently to be better prepared for next year?” Here is what they had to say:
#1: Re-evaluate tax regulations
While we stay updated on tax regulations, it is important that you stay informed as well so you don't overspend or over allocate in a category that might be impacted. Most recently, the IRS changed the requirements for items labelled under ‘Uniform Expense' and only qualifies items of clothing that are not suitable for everyday wear (i.e. clothes with logos or items like scrubs)
#2: Develop Habits Earlier
Tax Season is over and we are less than halfway through the year. You still have the opportunity to start fresh to keep your finances in prime shape! By collaborating with your financial team and reviewing all the information they equip you with, you should have an in-depth understanding of where your money is going in your business.
#3: ‘You don't know what you don't know'
You're bookkeeping team is happy to explain and provide insight into the books. Here are a few topics that others found helpful to discuss:
💡 What corporation status best fits your business
💡 Reviewing your salary or owner's draw to make sure it aligns with your profitability and revenue
💡 How to estimate & allocate tax funds for next year
💡 How to relate financials to your business decisions
💡 Habit building
#4: Hire a CPA earlier
So many of our clients waited until the last minute and were greeted with last minute chaos. It is never to early to start getting your ducks in a row!
#5: Setting aside money
Open and designate a new account solely for taxes. Doing this will help you save throughout the year, and it prevents financial stress when tax season comes. Start now to make it easiest on yourself! Now you may be wondering exactly how much money to set aside, especially under the present circumstances. We recommend setting aside at least 25% of your profit every month.
Share your lessons learned this tax season with us by emailing
support@kickstartaccountinginc.com
