Countless small business owners are finally breathing a sigh of relief after completing their tax returns in time to meet the April 18th filing deadline. But did filing your taxes require you to spend hours or even days sifting through reports, receipts and forms?
If you were overwhelmed by the amount of paperwork involved with filing this year’s taxes, there are strategies that you can implement now that can help you better prepare for next year. Yes, there is a better system than throwing everything into a box and waiting until mid-April to start sorting it. Here are some quick and easy ways to get organized and simplify the process of filing small business taxes.
1. Have a Dedicated Business Account/Credit Card
How can you possibly keep track of your income and expenditures when you’re using the same account to pay for office supplies as you are the kids’ school clothes? Accounting is dramatically easier when you have one account that is dedicated to your business. It just doesn’t make sense to have to sift through personal transactions to find those that are related to your business.
2. Keep Receipts Together
Start the habit of keeping business receipts in one location. Whether you use an alphabetized file folder or an online system like Shoeboxed, a convenient system that you can get into the habit of using on a regular basis is a key component to staying organized.
3. Familiarize Yourself with Small Business Deductions
Even if you complete your business tax return with the help of a tax professional, it’s smart to know what types of receipts and documents you should be saving. Everything from legal fees and training workshops to business lunches and that new laptop can potentially be valuable deductions. Both the IRS and the Small Business Administration have helpful articles that clearly define different kinds of business expenses. This will help you with your organizational system and lessen time spent trying to figure out where to put business phone or postage costs.
4. Invest in a Bookkeeping System
Whether you use accounting software or are still managing your bookkeeping by hand, it is well worth your time to devote a few minutes each week to tracking your invoices, deposits, checks, bills, bank reconciliations, credit card receipts and inventory. This can save you from major hassles when compiling your taxes or if you should happen to be audited.
5. Track Business Phone Expenses with Call Logs
Using RingCentral’s Call Logs feature, you can easily track business phone expenses, transactions, billings and other business metrics that are important for tax filing purposes. This information is downloadable to Excel, making it easy to see how much you’ve spent on business phone services.
While you may be still unwinding from working on your 2010 return, it’s never too soon to start planning for next year. With a little effort, you can go a long way to simplifying and streamlining tax season so that you can get back to business!
Originally published Apr 19, 2011, updated Aug 07, 2020