Tax filing, processing and returns are usually marred by delays and with the pandemic still hovering around, the delays seem to be apparent for this tax season 2022. So it always works to start to file them early to avoid delays and complications in the eleventh hour.
Small businesses often feel the pressure of tax preparation season due to the overall complexity involved in the process. Tax rules, their exemption, conditions, exceptions and year-end tax law revisions – there is plenty to untangle for a successful tax season. However, as a business, you need not do it yourself, as there are plenty of expert accounting firms who could help you with tax consultation and preparation services.
On the other hand, if you are a business that wants to adopt a DIY approach to your tax filing then this blog is for you. In this blog today our accounting experts at Back Office Accountants provide a simple 5-step approach or outline to ace your tax season 2022. Read on:
Step-1: Know your tax dates and penalties:
Given that the pandemic has meddled with usual deadlines, making note of your tax deadlines and dates is the first step to embark on your tax preparation. As both federal and state tax calendars vary, one must be familiarised with all the necessary deadlines and penalties levied if missed. So it is important to have a tax calendar set up to catch up with 1099s, quarterly tax payments and other tax obligations on the list.
Step-2: Collect, organize & compile the required documents:
Tax preparation and filing is an elaborate process that needs an extensive list of documentation. So prepare a checklist of documentation that needs to be collected and compiled for tax preparation. Pull together all your receipts, organize them to track your business expenses using a file folder or software with digital receipts.
Step-3: Update your Bookkeeping – Keep expenses, returns & reports handy:
Tax season is when the unorganized bookkeeping returns to seek its revenge and hence small business owners are often recommended to begin their tax preparation early. Now that we are right in the middle of the season, you may need to audit your business to ensure the books are in order. Organize and ensure consistency of all your expenses – marketing, payroll, and merchandise by category. However, if you do not have the right organisation of expenses we recommend you to seek the services of a remote accounting firm like Back Office Accountants to get your books in order.
Step-4: Familiarise yourself with common tax regulations & revisions:
In addition to being too complex, tax rules and regulations undergo revisions year on year. However, small and medium business owners can particularly leverage a few tax dedications from both state and federal governments. These tax breaks or opportunities encompass deductions related to home office – rent, mortgage, utilities, and even repairs, self-employment tax, QBI, insurance, business supplies and loans. If you are a small and medium business there is a high possibility of saving money by claiming these deductions. So if you are not fully aware of these tax revisions and regulations, we recommend you hire an expert remote accounting firm for a consultation.
Step-5: Understand the impact of the CARES Act & its tax provisions:
The pandemic year 2020 especially has brought plenty of federal tax revisions in terms of deductions for small and medium business owners. Many tax provisions and programs like PPP (Pay Check Protection Program) were introduced to help businesses answer guard from the recession. While there are plenty of opportunities for tax deduction they all are riddled with legislation and rule and hence need a careful study to help you understand your tax benefits. However these tax provisions under CARES Act can be highly beneficial for small and medium businesses. So we recommend you consult an expert accounting firm to seek help with these tax benefits in case you are short of time.
How Back Office Accountants can help?
An expert accountant or tax consultant can perfectly leverage the tax regulation and revisions to save your tax money. However, a business needs to have an immaculate record of documentation that can help them during this tax season. If you are a business that needs assistance with an audit, bookkeeping financial documentation, and consultation during this tax season, Back Office Accountants can help you with all aspects of tax preparation with our full-service back-office accounting services. You can contact our accounting experts here: https://www.backofficeaccountants.com/