Applying for an Extension
When your books are in chaos, and you are preparing for taxes you might need a little breathing room, here is your bookkeeping for small business checklist to determine if you are ready to file or if you should apply for an extension. You don’t have to wait until tax day either. If you know your going to have to file for an extension you can do it prior to March 15th.
However, a tax extension does not mean that you don’t have to pay your taxes on time. You are still responsible for making your payment by the tax deadline so be sure that you estimate what your fees are going to be, pay them and then begin working on your actual tax return.
You will need to document everything because “failure to document” includes its own penalties. In the event that you know you will not make the deadline, and you’re too rushed to take action right away, apply for the extension and pay what you think you owe. It is possible to file your return anyway and then amend it later, however in most cases, it’s easier to take a step back and ensure you file correctly the very first time.
So long as you pay your taxes, processing them later gives you time to be more detailed. It’s certainly much better than accruing interest and penalties.
Collect and Organize your financial data from payroll to expenditures. All the data should be arranged by category:
– Equipment expenses
– Business travel
– Office supplies
– Marketing costs
– Charitable donations and tax-deductible sponsorship’s
– Income from all resources broken down into sub-categories if possible
When you have other categories unique to your business, get them included as well. The main thing is to make it easy to recognize expenses and categorize them when it comes to bookkeeping for small business. Do not forget to go through your individual credit-card statements, in the event there’s a business expenditure lurking. You need to properly identify it on the receipt and show that it was a genuine business expense.
It could take time to locate a few of your documents which explains why applying for an extension in some cases makes sense.
Review Your expenses, check out your credits and debits. Once you coordinate your receipts and other financial information, review them to enable you to identify any credits or debits you might be missing.
Accounting software like QuickBooks or Xero can help you keep up your books, and stay organized so your prepared for tax season, or you can check with a tax professional for insight on what you might be eligible for. If you are using tax-prep software to investigate your expenses, ensure you using an up to date version. The tax codes change each year, so you may miss something if you are not using a current version of the software.
Better Bookkeeping for Small Business
Finally, if you’re not using an affordable outsourced bookkeeping firm like BooXkeeping and your trying to keep your own books and build your business there a few things you could do to put systems in place that enable you to keep better bookkeeping for small business records in the foreseeable future. Most importantly, setup a processing system for your receipts if you do not have one in place already. This is often a hard-copy system or something for scanning and managing digital copies. Immediately filing your receipts and sorting as you go saves hard work over time.
Unless you have accounting software, consider purchasing and utilizing it. Applications like QuickBooks or Xero can help you retain and track your financial information. You can utilize it for payroll, invoicing and expense tracking. You can also use QuickBooks to control and settle payments related to your business. Accounting software, coupled with something for managing receipts can lessen your headaches and prevent a last-minute scramble during tax time.
If you are looking to implement an outsourced bookkeeping solution so you can focus more on the growth of your business, then BooXkeeping is a great way to implement expert bookkeeping services without the time it cost you to do it yourself. Click here for your complimentary consultation today!
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