How Soon Should You Get Ready For Taxes?
Ah, tax season… these two words that so often inspire existential dread need not be such a problem. While getting your individual or business taxes in order can be a chore and a half, a little planning goes a long way.
Meeting Filing Deadlines Takes Time!
Individual salaried employees file taxes annually. Most businesses, though, are expected to send in quarterly payments according to what they estimate they owe. It’s worth looking at both situations. Even if you’re a business owner and already have professionals helping you, you ought to know what your employees are dealing with, and vice versa.
For this past tax season, the IRS estimated that individuals would have to spend 16 hours — that’s two full workdays — preparing their tax return forms. There ought to be a tax credit just for that!
That pales in comparison, though, to the amount of work that their employers and every freelancer out there deal with. Filing business taxes eats up an average of 80 hours of company time each year. More than one-fifth of companies have to dedicate over 120 hours to all that paperwork. Unsurprisingly, 85 percent of them get professional help. We’re not sure whether to feel sorry for, or deeply impressed by those 15% of brave businesses that DIY it.
The Role of Recordkeeping
Why is tax season such a huge burden on our time, especially for businesses? Sure, the forms can seem outrageously complex, and the laws arcane, but those aren’t even the biggest time issues.
The main problem is basic bookkeeping.
That’s right. Your taxes are a nightmare in direct proportion to how many receipts you still have randomly stuffed into a shoebox.
Hopefully you’re already more organized than that if you’re running a business. Even so, getting the paperwork tidied up is your biggest challenge at filing time.
Since recordkeeping is the most time consuming part of tax preparation, the best way you can reduce the time you spend on your taxes is to complete accurate and complete tax records throughout the year. This is true whether you prepare your return yourself, or hire a tax professional. Accurate records are also your best defense against an IRS audit. (nolo.com)
So, there’s the simple answer. When should you start working on your taxes?
Clear the Logjam Before it Forms
The sooner you get the recordkeeping in order, the less time you’ll have to spend finalizing everything on the day of the filing deadline. We recommend getting it all done the week before anyway, to give yourself time to deal with any unexpected discrepancies.
This is where we come in handy. SyncLedgers provides effective bookkeeping services that make tax time as relaxing as an April shower. We help you avoid those kinds of unpleasant surprises that can result in even-less-fun audits.
It’s as simple as scanning in your financial documents each day, or as often as you can, before you stuff them away for five years. We put them in order and record them in your books. We work directly with you and your preferred local tax professional to make sure they have everything they need to maximize your deductions and present everything accurately to the IRS.
So contact us today to start turning tax season into spring break!