April’s so far away…do you really have to worry about your taxes NOW? Right after the holidays are finally all wrapped up and you can relax for a bit, maybe enjoy a little New Year’s Eve champagne?
Short answer: YES. Getting started organizing your business finances now will prevent lots of headaches later. So before the year winds down completely, take some time to do the following and get your taxes in order.
Finally Get Organized
You’ve been meaning to do it for ages, but now’s the time to buckle down and get organized! You know that huge box of receipts you tucked away in a closet so you didn’t have to look at it next to your desk anymore? Bring it out and get it in order. Consider digitizing them for ease of searching later when you need to figure out deductions and exemptions.
Also, sign up for an account at GoDaddy Online Bookkeeping so you don’t have to worry about tracking your income and expenses anymore. It imports all your data and can help you tremendously when trying to report all the money you made and paid out to Uncle Sam.
Figure Out Deductions and Exemptions
Instead of waiting until you have the tax forms in front of you, spend some time to figure out which deductions and exemptions you qualify for ahead of time. This gives you more time to track them properly, saving you more money in the long run.
For example, did you know your business might qualify for the home office deduction? If you operate out of one specific room and pretty much only use that room for your work, it qualifies as a home office. Even if it’s a linen closet!
Or take into account day-to-day business travel deductions – so many business owners overlook this one. How much do you drive during the year? It’s probably way more than you think. Every little trip counts, including to the store for supplies and to the post office to ship packages. It all adds up, so add it up!
Go Over Your Contractor/Freelance Expenses
Make sure to pay extra attention to your contractor and freelance expenses for 2013. Not only will this factor into your taxes in April, dealing with these will also be one of the first things you do in the new year.
The freelancers and contractors you hired over the year need to figure out their taxes too. They can’t start until you send them a 1099-MISC from your company. Make sure you do this by January 31st!
Schedule an Appointment
If you have an accountant, don’t wait until April 14th to meet up with them. Not only will they not have a lot of time to answer your questions, they’ll be absolutely swamped with other clients’ questions.
Most business owners aren’t going to take advantage of the down time your accountant is experiencing right now, so their time is ripe for the picking. This way you’ll be way ahead of the game and if you do actually have questions on April 14th they’ll likely be easy follow-ups instead of “hey, so, are taxes due soon?”
Are you ready for tax time 2014?
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