Your business and how you handle your taxes are very important, especially to us. We know that having the right people helping you with your business finances is key in continued financial success. Let’s walk through why preparing for tax season matters.
Most business owners underestimate the amount of work required to file their tax return. They also make the mistake of hiring a business tax preparer to do the job for them, only to find out that they have made some expensive errors during the planning of their tax return. In order to avoid making such expensive mistakes, company owners need to hire a business accountant or CPA to plan their return. Artola CPA knows all the ins and outs of the Taxpayer Bill of Rights, which enables us to prepare for your tax season strategy. Continue reading to learn about some of the most common (and expensive) mistakes business owners make when determining how to care for their company’s fiscal tax health.
Being Reactive Instead of Proactive
One of the main errors many small business owners make in tax preparation is taking a reactive, instead of a proactive, approach to the financial workings of their company. In theory, it seems logical to keep all financial records organized and up-to-date. Unfortunately, the consistent practice of doing so can be lost in the day-to-day operations. As owners, it is essential to develop healthy record keeping and review from the start. But even if you haven’t, it isn’t too late to begin. Take the time to keep your financials organized. In addition, keep adequate records of all business-related expenses, including accounts payable and receivable. You should also perform monthly reviews of your accounting so that you understand where your company stands, both from a business standpoint and from a tax standpoint. Performing quarterly or monthly accounting reviews help you stay financially up-to-date so when tax season rolls around, you don’t have to deal with the stressful scramble of finding documents, or even worse, being blindsided by an overwhelming tax burden you didn’t expect.
The best way to ensure that your tax documents are in order (and to know if you are missing something!)is to retain the services of a Certified Public Accountant. CPAs have extensive training and experience in assessing the tax requirements of your business and can review the necessary business documents to support those needs, thus taking a load off your back, and hopefully keeping some extra cash in the bank!
Mixing Personal and Business Finances
Mixing personal and business finances might sound like an enticing way to manage a rising or new company. However, doing so creates a tangled web of confusion and stress. For example, should a financial problem arise in your business, it will reflect in your personal finances, and vice versa. Oftentimes, combining your personal and company finances leads to legal difficulties. Keeping the two separate is crucial, especially if you don’t have the legal and accounting expertise. Please consult with your CPA about how intersecting the two could alter the tax deductions you are eligible to take advantage of. By knowing this information in advance, you’ll stay organized, achieve better financial results, and manage your filings in the shortest time possible. We want you to spend less time worrying about tax season and more time running your business.
Now is the Time!
Now that we have walked through only some common pitfalls during tax preparation for your business, schedule a consultation with a certified public accountant and get started today. It is never too early to prepare for tax season, and Artola CPA can help with that. We’re committed to you and your company’s finances. Please contact us and ask your questions- we are here to help you successfully navigate tax season.