As a business owner, when it comes to winding down the tax season and keeping everything in order, things can get a bit hectic and more than a little stressful. Even for experienced business owners, sometimes knowing what to claim and what not to claim can be confusing at best, and at worst the process can feel impossible. Starting out with a plan, a guideline and at least a basic understanding of what is expected to be shown in your taxes can help to make this process a bit easier for those who prefer to file themselves instead of going to a company for their tax preparation services.
Expenses
Expenses make up the bulk of information in tax preparation paperwork for most businesses, big or small. Advertising, phones and computers, phone and internet services, business-related transportation and vehicles, rent, depreciation, business insurance costs, interest expenses, employee wages, office supplies and many other expenditures may be considered as a candidate for addition in this category of the paperwork. These expenses mark the necessary output of funds from a company required for its everyday operations and to bring in a profit large enough to sustain itself.
Income
Income is important year-round, but these numbers are particularly important when filing taxes for any business. This is where holding onto receipts from hiring outside services or purchasing goods can come in handy. Your tax preparation paperwork should take into account gross receipts from sales and services, sales records from the tax year in question, returns, allowances and interest accrued in any savings or checking accounts linked to the business. Other sources of income (which may vary depending on the type of business) should also be claimed on the tax form in order to ensure that the figures are accurate.
Goods
If a business is one which sells various goods, this information should also be included during the tax preparation process. This includes almost anything related to inventory – beginning and ending inventory dollar amounts, purchases, materials and supplies associated with inventory and even items removed for personal reasons. Keeping tabs on these sorts of expenses can help the business throughout the year as well as provide the best results when tax season rolls around.
Collecting and organizing the pertinent information for a business over the course of an entire year can be a daunting task. However, by maintaining an organized environment, doing some research and creating a checklist or guide containing the necessary steps, anyone can ensure that their tax preparation work goes as quickly and easily as possible.
