3 Powerful & Essential Bookkeeping Tips for Tax Season Compliance

Tax season can be a stressful time for contractors and business owners, but with the right bookkeeping strategies, you can ensure compliance, avoid costly errors, and streamline the filing process. At 24hr Bookkeeper, we specialize in helping contractors leverage the power of Buildertrend and QuickBooks Online (QBO) to keep their financials organized and compliant with IRS regulations.

Here are three essential bookkeeping tips to help you navigate tax season while maintaining compliance:

1. Organize Your Expenses

Properly categorizing your expenses is crucial for ensuring compliance and maximizing your deductions. Here’s how you can make the process seamless:

• Utilize QuickBooks Online (QBO): QBO offers tools to categorize expenses into tax-deductible categories, making it easier to identify eligible deductions during tax season.
• Leverage Buildertrend: Sync Buildertrend’s project-specific cost tracking with QBO to ensure expenses align with tax-deductible categories. For example, allocate labor, materials, and equipment costs to the appropriate projects for precise reporting.
• Review Regularly: Periodic reviews of categorized expenses can help prevent errors and ensure every deduction opportunity is captured.

By staying organized, you not only make tax filing simpler but also maintain accurate records that stand up to scrutiny in case of an audit.

2. Verify Vendor Information

Compliance with IRS requirements for 1099 filings is essential, and accurate vendor information is the foundation for proper reporting:

• Review Payment Histories: Use Buildertrend to generate vendor payment summaries and verify amounts paid to subcontractors and vendors.
• Confirm W-9 Forms: Ensure all eligible vendors have completed and submitted a W-9 form. This form provides the necessary Taxpayer Identification Number (TIN) and other details required for 1099 preparation.
  
• Automate 1099 Preparation: Sync Buildertrend’s vendor data with QBO to streamline 1099 preparation and filing. By automating this process, you reduce the risk of manual errors and ensure timely compliance with the IRS deadline of January 31.

Verifying vendor information early helps avoid penalties and ensures your business remains compliant with federal regulations.

3. Reconcile Accounts Regularly

Regular account reconciliation is key to maintaining accurate financial records and ensuring compliance with tax laws:

• Match Transactions: Use QBO’s bank reconciliation tools to match transactions with Buildertrend’s expense data. This process ensures that all expenses are accounted for and correctly categorized.
• Identify Discrepancies: Regular reconciliations help identify and resolve discrepancies between your bank records and accounting data before they become significant issues.
• Maintain Accurate Records: Reconciling accounts ensures your financial records are audit-ready and compliant with IRS requirements, giving you peace of mind during tax season.

By reconciling accounts consistently, you minimize errors, improve accuracy, and ensure a smooth filing process.

Why Compliance Matters

Compliance isn’t just about avoiding penalties—it’s about protecting your business and building trust with stakeholders. Non-compliance with IRS regulations, such as failing to file accurate 1099 forms or misclassifying expenses, can lead to audits, fines, and reputational damage. By staying proactive and leveraging tools like Buildertrend and QuickBooks Online, you can ensure your bookkeeping practices align with federal and state requirements.

At 24hr Bookkeeper, we’re committed to helping contractors achieve financial clarity and compliance. Our expertise in Buildertrend and QBO integration ensures your business is prepared for tax season and beyond.

Conclusion

Tax season doesn’t have to be overwhelming. By organizing your expenses, verifying vendor information, and reconciling accounts regularly, you can ensure compliance and set your business up for success. Let 24hr Bookkeeper guide you through the process with our expert bookkeeping services and seamless integration of Buildertrend and QuickBooks Online.