# A Beginner’s Guide to Dealing with Tax Season for Business Owners
As a business owner, dealing with financial numbers is a continuous process throughout the year. However, as soon as the tax season comes, it brings along a series of additional responsibilities, specifically tax preparation tasks. Tax preparation involves significant effort and is time-consuming, requiring extended hours of work to file accurate taxes and meet compliance.
If you’re doing your own business taxes, tax preparation can be comprehensive and complex. Thus, you would need to put aside some core roles and pull out a considerable amount of time from your daily schedule to manage your taxes effectively. However, failure to comply with regulations, including errors, typos, overlooked mistakes, filing incorrect financial information, and filing excessive write-offs, can put your business at risk of an audit.
Thankfully, there are many solutions to prepare your business taxes and make this time a little more manageable. This post aims to provide you with six tips to deal with the busy tax season.
## Six Tips to Deal with the Busy Tax Season
### 1. Start Early
One of the best practices to prepare your business taxes is to start early. You can begin by updating your books daily or weekly to ease the process. Maintaining your financial information timely can help make things more manageable during tax season. It is also helpful to collect all the necessary information required and prepare a data set for other processes.
Get started as soon as possible to speed up tax preparation and avoid associated burdens and stress. Tax season may seem like a daunting time, but getting ahead can make all the difference.
### 2. Review Transactions for Accuracy
When calculating your business taxes, you need high-quality financial data to make sure numbers are correct. Bank account reconciliation is an effective way to ensure the accuracy of your financial records. This side-by-side comparison between your company’s books and bank account statements can reveal any mismatched entries that can result in ruining tax calculations.
Review transactions regularly to ensure you have correct numbers for tax filing and to comply with the GAAP guidelines. Business professionals might also benefit from errors and omissions insurance, which shields them against financial errors or negligence.
### 3. Organize Your Financial Papers
The IRS mandates documented proof if you apply for tax deductions. Thus, having an organized, quickly-accessible set of financial records can help reduce tax prep time and effort. One of the best ways to make your tax season hassle-free is to update your financial records regularly and keep them well-organized.
If you have never maintained any records, now is the time to spend some hours collecting the necessary information, including personal details, business information, important financial documents (like income statements, P&L statements, balance sheets, etc.), and financial reports. Keep things organized, and it will be easier to prepare the necessary tax files.
### 4. Take Advantage of Technology
Consider leveraging technology for your accounting and tax preparation needs. Various software applications are available in the market to assist with financial accounting functions such as expense tracking, generating statements and customized reports, and determining deductions.
All these tasks are necessary for tax filing purposes, and the software can help you perform the same quickly and easily, making your tax season less complicated and hectic. You might also be able to file your taxes electronically using approved online tax-filing platforms from various tax institutions worldwide.
### 5. Stay Up-to-date with Tax Laws and News
Tax laws are always changing, so it is beneficial to review them before preparing your taxes, even if you have deep knowledge of these regulations. For example, you might be eligible to file some COVID-related tax credits due to the recent pandemic, and staying updated about the latest changes in tax laws will ensure that you do not miss any opportunities.
Several resources, such as news alerts and authentic information from tax institutions worldwide, can help you keep yourself updated about tax law amendments. If you cannot find any resources you trust, consult a professional and ask them to help you find trusted resources.
### 6. Seek External Support
If you face issues managing your taxes timely, it is best to seek external support. Tax preparation is complicated, and the level of expertise it requires, combined with the sudden increase in tax workload, can impact the busy tax season’s challenges. The sooner you involve a professional tax preparer, the better you’d prepare for taxes.
Many businesses consider tax preparation outsourcing a strategic option. Outsourcing ensures timely tax preparation, saves on tax prep costs, and enables in-house teams to focus on daily roles. You may also outsource tax preparation to reap these and other relevant benefits.
## Conclusion
Dealing with tax season as a business owner can be challenging. However, setting yourself up for success by starting early, reviewing transactions for accuracy, organizing your financial records, leveraging technology, keeping up-to-date with tax laws and news, and seeking external support can make your tax season less stressful and more manageable.
In summary, staying focused on your goals, even during the busiest tax seasons, can lead to better business results.