Smooth Sailing for Your Business’s Tax Return

As tax season approaches, here are some tips to help make filing your small business’s tax return a smoother process.

Reconcile your bank accounts

Accurate books are the foundation of a solid tax return, and reconciling your bank accounts is a critical first step. Ensure your cash accounts are up to date to avoid over-reporting or under-reporting income.

Organize credit card statements

If your business uses credit cards, create an expense report for each statement. This report should categorize transactions into the correct expense accounts and attach copies of receipts. This helps support both income and sales tax audits and ensures you only include business-related expenses. Be sure to reimburse your business for any personal use of the card.

Reconcile accounts payable

One of the first tax deadlines is issuing 1099 forms to vendors and contractors by the end of January. Ensure your accounts payable are current to accurately track payments to vendors.

Get information reporting in order

Identify any vendors paid throughout the year who need a 1099, particularly non-incorporated consultants or gig workers. Attorneys also fall into this category. Make sure you have their names, addresses, identification numbers, and billed amounts. Send W-9s early to gather missing information.

File employee-related tax forms

File necessary W-2 and W-3 forms, along with federal and state payroll returns (Forms 940 and 941), as soon as possible in January. This allows time to address any issues that might arise.

Compile major purchases

Create a list of major purchases made in 2024 and gather detailed invoices. This documentation is essential for determining whether to depreciate the purchase, utilize bonus depreciation, or immediately expense it under section 179. These choices can be valuable for tax planning.

By organizing these key aspects early, you’ll be well-prepared for tax season. If you need assistance, don’t hesitate to contact us for support.