5 Things to Do To Prepare for Small Business Taxes by January 31

You know what comes right after holiday season, don’t you?  Taxes!

The sooner that you get your materials together for your small business taxes, the more free you will feel.  If you are a small business owner and you’re NOT in retail, you may notice your work slows down the end of December and the beginning of January. This is an ideal time to gather your information for your small business taxes together, shred what needs to be shredded and scan the rest.

Doing these types of activities will give you a clue about what you might owe for your small business taxes. If you need to gather funds together to pay, it give you a clear idea of what you need to do.

Here are five steps that I recommend to prepare for tax season:

Review your profit and loss.  Does it make sense?  Are there items that need to be recatagorized? Do you have a large number in a category marked, “Miscellaneous”? Don’t be afraid to question your bookkeeper.  Bookkeepers make assumptions. Understanding our business finance is an ongoing learning experience.  Bookkeepers help us learn.

Make sure you are legally compliant.  Many forms, particularly if you have used employees or contractors, need to be generated by January 31.  Talk with your bookkeeper and make sure that you are on track to generate these forms for your small business taxes.

Get a new mileage book.  Retrieve the old one from your car and do the math to figure your mileage for the year for your small business taxes.  A spreadsheet can really speed up the process!

Ask your bookkeeper to prepare your files. If you are using QuickBooks or other accounting software, steps need to be taken to prepare the file for a CPA.  Make sure that the changes that you want to make based on your profit and loss analysis are complete. Then have your bookkeeper prepare your file for your small business taxes.

Gather receipts. Close out your files for this year. Dedicate a day to sort what you need to keep and shred what you don’t.  Keep the old receipts handy until you mail your small business tax returns.  Then put them in storage or scan them using something like Neat Receipts . Get yourself crisp and clean files for the new year.  Signal to the universe that you are ready to keep clear, clean records of all the income that is coming your way! 

Bonus:  Schedule your CPA appointment. The sooner you schedule, the sooner your tax return will be ready.  Don’t use a CPA?  Then schedule the time you will need to sit down and DO your small business taxes.  Make it a goal to get them all complete and ready to go by the end of February.

And reconsider using a CPA.  The money they save you, not to mention the time, will more than pay for itself.

When you have completed this annual small business taxes chore – celebrate!