Question: What is your best tax prep advice for entrepreneurs looking ahead?
Talk to Your Accountant
"Stay in touch with your accountant throughout the year. If you haven't already, set up a system such as QuickBooks that automates the process for you and makes it easy for your accountant. Be sure you understand what you can and can't write off as a business expense, any other changes, laws, etc. Talk to your accountant well before tax season!"
Automatically Itemize Transactions
"We use a tax professional to assist us in our filings. However, we also use Mint, which automatically itemizes and categorizes what goes in and what goes out across all financials. We can go in and edit categories, make notes, etc., for things to be more clear for the accountant as it happens. Keeps things clear and easy to make decisions with during tax season."
Don’t Leave It to the Last Minute
"Trust me. You want to keep your finances in order on a month-to-month (or even week-to-week) basis. You don’t want to have tax season roll around and then find yourself scrambling to find your invoices and tabulate your expenses. That’s a sure way to drive yourself mad – and to land yourself in trouble if you get audited. Hiring a bookkeeper to generate or at least review your books is a must."
"Keep everything together in a file throughout the year and especially once the year-end documents start coming in. This will save you the headache of having to scramble everything together by the deadlines, and your accountant will be happy too."