Business Owners: What You MUST Do Before Tax Day
As the tax deadline looms, business owners need to ensure their financials are in order to avoid costly mistakes and maximize deductions. The last month of tax season is crunch time, but working with an accounting firm can help streamline the process, minimize stress, and ensure compliance. Here’s how you can efficiently collaborate with your accountant to wrap up tax season smoothly.
1. Gather and Organize Your Financial Documents
To make the most of your accountant’s expertise, ensure that all financial records are complete and properly categorized. Provide:
Bank statements and credit card statements
Profit and loss statements
Balance sheets
Expense receipts and invoices
Payroll records
Copies of any 1099s and W-2s issued
Organizing these documents in advance allows your accountant to process your return quickly and accurately.
2. Communicate Business Expenses Clearly
Many small business owners miss deductions simply because they fail to communicate expenses effectively. Be sure to provide detailed records for:
Home office expenses (square footage, utilities, rent/mortgage allocation)
Vehicle and mileage logs
Business meals and entertainment
Equipment and software purchases (potential Section 179 deductions)
Any charitable contributions
Your accountant can help you maximize these deductions when they have clear, documented information.
3. Review Your Estimated Tax Payments with Your Accountant
One of the most common mistakes businesses make is underpaying estimated taxes. Work with your accounting firm to:
Compare actual income to estimated payments made throughout the year
Adjust for any shortfalls to avoid penalties
Plan ahead for next year’s payments
4. Ensure Payroll and Contractor Compliance
An accountant can help you verify that all W-2s and 1099s were issued correctly and that payroll taxes are fully paid. If any errors are found, they can guide you on how to correct them before penalties accrue.
5. Consider Filing an Extension (If Necessary)
If you’re not ready to file, your accountant can submit an extension (Form 7004 for businesses). This gives you extra time to complete your return accurately while avoiding rushed errors. Keep in mind, however, that an extension doesn’t delay your tax payment deadline.
6. Plan for Next Year’s Tax Strategy Now
Once this tax season is behind you, meet with your accountant to discuss ways to improve tax efficiency moving forward. This includes:
Adjusting your estimated tax payments
Exploring new deductions and tax credits
Structuring your business for optimal tax savings
Last-minute tax preparation is stressful, but working with an accounting firm ensures accuracy, maximizes deductions, and keeps you in compliance. If you haven’t already, now is the time to reach out to your accountant, submit your financial records, and let them help you navigate tax season with confidence.
Don’t wait until the last minute—partner with your accountant today to ensure a smooth and stress-free tax filing!