The end of the financial year is nearing, and our clients are all getting ready for the transition into tax time. As one of the premier accounting firms in Atlanta, GA, we are always thinking ahead to make the upcoming filing season as seamless as possible. Here, we list the top 10 things every client should do now to alleviate financial headaches and piles of paperwork in the coming weeks.
1. Start gathering financial statements. This includes any business credit card statements as well as statements from your bank account.
2. Calculate your total business income versus your total business expenses so that your Atlanta accountant can easily determine your assets and liabilities.
3. Track your expenses. One of the biggest frustrations for business owners during tax time is finding receipts for deductions and expenses. Start sorting through your deductible paperwork now; sort them into categories such as by date or type of expense. Organized receipts are much easier for your tax accountant to work with than a shoebox full of random expenses.
4. Download helpful apps or expense tracking software. It may be too late to help with this year’s financial reporting, but it never hurts to get a jump start on the new year. Apps are available to track deductions as you go. Examples include mileage tracking apps and programs that scan, sort and store your receipts in digital files.
5. Calculate your deductible mileage. If you use your personal vehicle for work, the miles you drive for business outside of your commute are tax deductible so long as you have records to back up your mileage.
6. Max out your deductions. This is the time to write a check to charity or boost your advertising budget.
7. Gather records of gains or losses on the sale of depreciable assets. You will need a record of the date of sale, the price you sold the assets for, any costs incurred as a result of the sale, and any accumulated depreciation of the asset.
8. Gather records of payments made to and on behalf of employees and independent contractors throughout the year. You should have a signed Form W-9 on file for all independent contractors to whom you paid more than $600. You must send out Form W-2 to your employees and a 1099-MISC to independent contractors no later than January 31st.
9. Verify that you have paid enough estimated tax payments throughout the year. The final estimated tax payment is due in January, but you may need to increase the amount you would normally pay to help reduce underpayment penalties.
10. Start talking to your Atlanta tax accountant now about any other steps your business should take to prepare for the end of your financial year. Your accountant may be able to give you tips on further lowering your total tax bill before the end of the year.