If you visit your local post office on April 15th, you’ll most likely see a long line of people waiting to file their tax returns before the deadline. Getting prepared for tax season now can ensure a painless filing experience. Tax season happens every year but small businesses (and their owners) sometimes feel ill-prepared to deal with the complexities of tax compliance. And with a new tax law in place, it is more important the ever to begin your preparation
Here are three important tips to help you prepare for a smooth tax season.
1. Find an accountant or CPA now.
If you don’t currently have a CPA, ask colleagues, your local chamber of commerce or bank, lawyer and financial advisor for a referral. Once you have a CPA, you can search for their eligibility to file your tax returns on the IRS Directory. CPAs and Enrolled Agents are qualified to file your tax returns and represent you in front of the IRS.
You can visit the IRS search site here: https://irs.treasury.gov/rpo/rpo.jsf
2. Get your financial house in order.
Before you can start your tax returns, you will need your financial statements in order. Speak to your accountant or CPA about when to expect the preparation of your financial statements.
Contact your bank or visit your online bank account to download monthly bank statements for your accountant. Consider using Quickbooks or another bookkeeping software to organize your financial data. Using accounting software makes it easier to create reports for your business, file tax returns and provide support for bank loans.
3. Be sure to send Form 1099s and W-2s to employees and payees.
According to the IRS, if you’re a small business or self-employed and you made payments greater than $600 during the year to independent contractors, you’re may be required to send Form 1099s to those you paid and the IRS.
You are required to file Form W-2 for any employees that you paid $600 or more for the year and for those you withheld taxes for during the year.
Getting started earlier can give you the peace of mind that comes with the knowledge that your taxes have been handled. If you follow these tips, you’ll be well on your way to dealing with this important part of your business.
Ebong Eka is no stranger to the world of personal finance. As a certified public accountant and former professional basketball player he offers a fresh perspective to small business planning and executing. With over fifteen years of accounting, tax & small business experience with firms like PricewaterhouseCoopers, Deloitte & Touche and CohnReznick, Ebong provides practical money solutions tailored to the everyday person, the aspiring entrepreneur or the small business owner.
Ebong is the founder of EKAnomics, a sales, pricing and leadership firm. He is also the founder of Ericorp Consulting, Inc., a tax and management consulting firm. Ebong is the author of “Start Me Up! The-No-Business-Plan, Business Plan.”
Ebong is also the founder of The $250 Tax Pro, which provides tax preparation and consulting services in the Washington, DC area.
Bank of America, N.A. engages with Ebong Eka to provide informational materials for your discussion or review purposes only. Ebong Eka is a registered trademark, used pursuant to license. The third parties within articles are used under license from Ebong Eka. Consult your financial, legal and accounting advisors, as neither Bank of America, its affiliates, nor their employees provide legal, accounting and tax advice.
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