Although we are still in the Holiday Season rather than tax season, it is not too early to get started on preparations for your 2013 return. Just as one should not wait for the night before an exam to cram for a test, the same applies to getting your documentation in order before meeting with your accountant.
Most small business owners wait until March or April to meet with their accountants. A better idea is to prepare now for the meeting and schedule the appointment with your tax preparer in January or February. He or she will appreciate getting a head start before tax crunch time. Both of you will be less stressed out than you would be in mid-April.
Get Your Financial House in Order
Whether you do your own bookkeeping throughout the year or have an accountant handle it for you, get a handle on your financial records. During the week between Christmas and New Year’s Day, take some time to sort through your receipts. Make sure:
- Your records are up-to-date and accurate.
- Go through income records.
- Employee forms (W-2 forms and 1099 forms).
- Receipts from all business-related expenses (credit cards, cash receipts, etc.).
- Depreciation documentation (auto mileage, etc.)
If you had a good year revenue-wise and foresee major expenses in the future, consider making the purchase now to lower your taxable income for 2013. Now is also a good time to make charitable donations. Consider putting them on a business credit card, and then pay it off promptly. This can help you improve your credit score.
Sole proprietors might consider changing their business format and incorporating. Establishing an LLC or a C-corporation formally separates business assets from personal assets. Further, there can be tax advantages of setting up an LLC or C-Corp. Firms such as The Company Corporation offer advice and incorporation services for thousands of entrepreneurs each year.
Besides potentially saving money, incorporating gives a company a more professional image. Utilize the slow time at the end of the year to look into the advantages of incorporation.
There is so much to know about taxes, but most small business owners are not experts in this area. They are much better at running their business. Many entrepreneurs can do their filings on their own, but more often than not, an experienced tax accountant can help them save significant sums of money.
Numerous tax laws will change after December 31st. Your tax expert can help you take advantage of opportunities that expire at the end of this year. Further, if you owe money to Uncle Sam, your accountant may be able to point you in the right direction if you need money to pay your tax obligations.
Join Us for a Webinar
Webinar: Year-End Small Business Accounting Tips
When: Tuesday, December 10, 2013 at 3:00 PM (EST)
Who: Co-hosted by my company, Biz2Credit, and Small Business Trends.
Details: Featuring money-saving tax advice from Alan Goodman, a veteran CPA, and John Meyer of The Company Corporation an expert in business incorporation. Anita Campbell, the founder of Small Business Trends, will be the moderator.
Registration: Join us and sign up now, it’s free – hope to see you there!