Filing your taxes early has some benefits. It lets you get your refund faster or have more time to pay what you owe. Also, it helps you avoid becoming a victim of tax refund fraud since you don’t give the scammers a chance to submit your return for you. To get ready for tax filing, you need a professional in business tax preparation in Troy, MI to help you get things in order. Also, here are steps you can take:
Make a Decision
Do you want to prepare your taxes by yourself or hire a professional? No matter the size of your business, you can benefit from the services of an expert. Look for a CPA to handle the tax preparation job for you. Keep in mind though that even if you outsource this task, there are still things you need to do. You must collect and organize your financial statements and records, as well as decide the software program to use.
Complete the Expense Recording
Ensure all deductible expenses are recorded. By doing it early, you can do it more accurately and save time down the road. Ensure to record expenses from all receipts and keep them instead of depending on bank statements.
In addition, consider if you are missing deductions for some business purchases made with your personal accounts. Keep in mind that only business purchases can be deducted.
Run the Tax Reports
To prepare the tax returns of your business, you may need to use a profit and loss report. If you tend to pay taxes on received income and deduct paid expenses, run the report according to income collected instead of income billed.
To organize your tax documents, establish a central repository for them to ensure you don’t misplace anything. Keep in mind that the IRS obtains a copy of the majority of such tax forms, so ensure your final tax returns reflect such numbers.
In addition, make a designated place to collect important documents such as tax records throughout the year. The last thing you want is to look for misplaced files and records.
Make Your Last Quarterly Tax Payments
Underpayment of estimated taxes can lead to penalties. You must pay income tax as earned instead of as a lump sum. Self-employed individuals and business owners must make estimated tax payments 4 times every year. With these quarterly payments, your tax burden is spread out.