Never fail, tax time comes around every year. And somehow it sneaks up on us every single year. With so much to do and the need for accuracy, it’s not something you want to put off to the last minute. If you are prepared for tax time, it won’t feel quite as difficult. Since we already talked about everything you need to do so employees and contractors can do their taxes, let’s talk about your company’s taxes and what you can be doing now in January to get ahead of the game.
Corporate Tax Returns Due
Corporate taxes must be filed by March 15. If you do need to file for an extension, March 15th is also the date to deadline to do so. Mark that date on your calendar!
How to Prepare
Ok, March 15! Sounds like you have plenty of time, right? That date will be here before you know it. Don’t wait until a week before the tax deadline to start pulling everything needed together. You should start getting your documents compiled, organized and ready now!
Here is what you should do now:
Reconcile Your Financials
The first thing you need to do is get financials from last year reconciled. And just to be clear… what we mean when we say reconciled is that you are comparing your internal financial records to external sources, such as bank statements, to make sure that they match up. Account reconciliation confirms that your financial information is consistent, accurate and complete. This also helps ensure that you are able to get reliable and accurate financial statements.
This could mean that you have to back through bank statements, credit card statements, receipts, checks, loan payments, incoming payments, etc. to ensure that everything is accounted for. If you weren’t able to keep up on your bookkeeping last year, now is the time to get caught up! It is extremely important to have organized accurate record keeping for tax purposes.
Gather Documentation
Another thing that you can be doing now to prep for tax time is gather up supporting documentation. This could be documents like:
- Previous year’s tax return
- Items purchased (vehicles, equipment, large tools over $2,500, etc.)
- Assets sold
- Grant documentation
- Loan documentation
- Income records
- Expense records
- Payroll data
- Deductible expense information
It is recommended to keep these documents for at least 3 years. If you have a system or workflow for keeping and organizing your supporting documents, it will make tax time so much easier. Expert tip: you can file these documents electronically in your QuickBooks file, Google Drive or other file storage applications.
Reports
You are also going to need copies of several financial reports for your taxes. These will be important to provide to your tax preparer.
- Profit and Loss Report to show whether your company made or lost money for the year
- Balance sheet to show your assets and liabilities
- Statement of cash flows to show the money coming into your business and the money flowing out of your business
- WIP Schedule to show the status and what has been paid on for any open projects at the end of the year
As you know and can see, there is a lot of detailed information to be compiled for your corporate taxes. This can be rather time consuming if you aren’t extremely organized in your workflows throughout the year. With everything that needs to be gathered, and the fact that it must be accurate for the IRS, once the year ends, it doesn’t leave a ton of time to enter, reconcile, problem solve and track down anything that is missing. If you have all of this compiled, organized and ready ahead of time, your CPA will definitely thank you!
Although 24hr Bookkeeper doesn’t replace your CPA, with our monthly and workflow services you can ensure that you have what you need, when you need it and you can trust it is going to be right. Our experts know what is needed come tax time and will help keep your financials up-to-date and organized so you aren’t scrambling this time next year.
How can we help you? Set up a meeting today to discuss your needs!
