preparing for tax time all year long

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preparing for tax time all year long

Having a certified personal accountant working with you to prepare for your taxes throughout the year will help you in so many ways. Do you wait until the beginning of the year to get your documents in order to file your taxes? Did you realize that doing so could end up costing you money when you do file your taxes. This blog will show you some of the things that you could be missing if you aren't paying attention to your taxes until it is time to file. Maybe after reading, you will make changes to the way you go about preparing for tax time.


Preparing For An Upcoming Business Audit

A business audit can elicit a sense of panic if your records aren't already perfectly in order. Here are some things you can to do get your documents ready for an auditor. 

Hire a Helper

For starters, it can help to have a bookkeeping or accounting firm on your side when it comes time for an audit. They can make sure that you are prepared to provide all of the documents that the auditor will require. They will also help to present the documents in a neat way, which can help to show the auditor that you were careful about keeping track of your financial records. The bookkeeper can also speak on your behalf, in a knowledgeable way, to help clear up any issues that come up when the auditor is assessing your records. The accountant can also help to answer any concerns that you have and help you to decide what to do if there are any gaps in your records or other issues to contend with. 

Prepare Your Returns

The first thing that a bookkeeper or accountant will do to prepare your business for an audit is prepare your tax records. Aside from the tax filings themselves, your bookkeeper will need to locate any records that support the documents. This could include business receipts and invoices, vendor documents, or sales records. Your business credit and debit card receipts will also be needed, and it helps to have them organized, with the receipts attached. You could use a numbering system to correlate each line item to a receipt in order to make it even easier to see where all of the money went. 

Find Missing Records

When you're organizing your receipts and tax records, you may notice that there are some line items that don't have any supporting documentation. It pays to go through the effort of tracking down these receipts. You may need to place some phone calls to your vendors or clients to get copies of their invoices in order to fill these gaps. If you order supplies online, you may also be able to locate electronic copies of receipts for some of your spending. Depending on how many receipts are missing, a lack of documentation may or may not be an issue with your auditor.

Ask Questions

Some record-keeping issues can't be easily boiled down to a receipt, so be sure to have a bookkeeper or accountant on hand to ask those tricky questions. By knowing what to expect and prepare before the audit, you can impress your auditor with thorough records.