Never again will I wait until the last minute to do my taxes

You might make this vow every year after the cluster-f**k that is tax time for your business. But like most New Year’s resolutions, this vow is forgotten before you implement any changes.

I will give you some tips for organizing your business tax files that you will ignore again this time. But hey, they say it takes a person hearing something eight times before you act on it. So consider this the 158th time to hear this advice.

Track your business finances with account software

Pick one of the many software options available – QuickBooks, Quicken, Wave, Freshbooks, Xero, etc. Or use a simple spreadsheet if you don’t need standard financial reports like a Profit and Loss Statement or a Balance Sheet. A shoebox full of receipts may seem easy to manage during the year, but come April 14th, it just catches your tears. Oh, but you have a CPA to prepare your taxes? If you bring them a shoebox, they will curse your children and your children’s children. Then your grandson comes out with three heads.

Separate your business and personal transactions

Don’t run your business expenses and income through the same account you run your personal transactions. Please, just don’t. Do you want to slog through twelve months of transactions to find the 20% that are business-related?

Have a special place to put those tax forms

Think of all those lovely tax forms that trickle in at the beginning of the year – 1099s, 1098, K-1s. Create a file or basket or cloud storage where you collect them until you send them to your CPA or prepare your return. Some of them are just half slips of paper – they get lost so easily.

In conclusion, I don’t need to add a conclusion because you probably tuned out after I told you to set up accounting software for the 158th time.

Leave a Reply