Tax season can be a stressful time for many individuals and businesses. However, now that it’s over, it’s the perfect time to start thinking about how to be better prepared for next year. By taking some time to prepare throughout the year, you can make tax season less stressful and more manageable. Here are some tips to help you be better prepared for next year’s tax season:
Keep track of your expenses
One of the most important things you can do to prepare for tax season is to keep track of your expenses throughout the year. This includes both business and personal expenses. By keeping accurate records of your expenses, you can ensure that you’re claiming all of the deductions you’re entitled to when it comes time to file your taxes.
Consider using a spreadsheet or accounting software to keep track of your expenses. Make sure to include all receipts and invoices, and categorize your expenses appropriately. This will make it easier to prepare your tax return and will help you identify any areas where you can save money.
By taking a little bit of time every day or week to organize your expenses, you will save yourself hours of time (and a headache) when April rolls around!
Save for taxes throughout the year
If you’re self-employed or run a business, it’s important to save for taxes throughout the year. This is because you’ll need to pay estimated taxes on a quarterly basis. By setting aside money each month for taxes, you can avoid any surprises when it comes time to pay your taxes.
Are you a 1099 employee? You’ve felt the pain of paying taxes on the money you’ve worked hard for every year. It pays to be prepared before tax season comes so you know what to expect.
Consider setting up a separate bank account for your tax payments. This will help you keep your tax money separate from your other funds, making it easier to track your expenses and prepare your tax return.
Stay organized
Staying organized is key to being prepared for tax season. Make sure you have a system in place for keeping track of all of your important documents, such as receipts, invoices, and tax forms. Consider using a filing system or a digital storage solution to keep everything organized and easily accessible.
There are several ways to keep tax documents organized throughout the year. One way is to create a dedicated folder or file for all tax-related documents, including receipts, invoices, bank statements, and any other relevant records. Using a digital document management system can also make it easier to keep track of important tax documents, as well as provide a secure backup in case of loss or damage. It’s also important to keep accurate records of all business expenses and income throughout the year, and to regularly reconcile financial statements to ensure that all transactions are accounted for.
Make sure to also keep track of any important deadlines, such as the deadline for filing your tax return or the deadline for making estimated tax payments. Set reminders for yourself so that you don’t miss any deadlines.
Work with a tax professional
If you’re not comfortable preparing your own taxes, consider working with a tax professional. A tax professional can help you identify deductions and credits that you may be eligible for, and can help ensure that your tax return is accurate and complete.
Some professional organizations (like Kurv Business) can not only help you with your taxes when tax season comes around – we can also help streamline your bookkeeping systems so tax season isn’t so daunting in future years. A holistic and all-encompassing approach to filing your taxes starts with accurate bookkeeping!
Make sure to choose a tax professional who is qualified and experienced. Consider asking for recommendations from friends and family, or look for a professional who has experience working with individuals or businesses in your industry.
Review your tax return
After you’ve filed your tax return, take some time to review it and look for areas where you can improve.
It is important to review your tax return after it is filed to ensure that it is accurate and complete. Even small errors or omissions on a tax return can result in penalties, interest, or even an audit by the IRS. Reviewing your tax return can help you identify any mistakes or discrepancies before they become larger issues.
It’s also important to review your return to ensure that you are taking advantage of all available deductions and credits, which can help reduce your tax liability and increase your refund. For example, if you had to pay a large tax bill, consider whether you missed anything that could have reduced your tax liability. By reviewing your tax return, you can ensure that you are in compliance with all applicable tax laws and regulations, and avoid any unnecessary penalties or legal consequences.
Make a note of any areas where you can improve, and start implementing changes throughout the year to be better prepared for next year’s tax season.
In conclusion, being better prepared for next year’s tax season starts with taking a proactive approach to your finances. Keep track of your expenses, save for taxes throughout the year, stay organized, work with a tax professional if needed, and review your tax return to identify areas where you can improve. By following these tips, you can make tax season less stressful and more manageable, and ensure that you’re taking advantage of all of the deductions and credits you’re entitled to.
Do you feel lost in a sea of paperwork and files when it comes to your business’s taxes? Kurv Business can help you optimize your tax-paying process and make sure you are prepared when Tax Day comes around. Contact us today to learn about our solutions to make doing business easier!