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Three Things to Prepare for Tax Season
Everyone I know puts their hands to their shaking heads when I ask them about tax preparedness. No one seems to ever feel fully prepared - of course that's only people who aren't on our client roster but that's another post.
In all seriousness, we've had people bring in a card board box full of receipts, envelopes, statements, and other paper flotsam on April 15th expecting to be able to have their taxes filed correctly by midnight. We might be good, but no one is that good!
There are three things you have to have kept track of in order to properly file your tax return or have it prepared accurately.
- Total sales
- Total expenses
- Changes in Depreciable Assets
The first two are sort of the no brainer's of the bunch. You have to know how much money came into your business and in order to take advantage of deductions associated with the cost of doing business you also have to have kept track of how much of that income you spent on what. Depreciable Assets, however, are not so simple.
For example, you can depreciate that truck you bought three years ago but if you sold it this year the remaining depreciable value becomes income you'll have to factor in, even if you sold or closed the business. That depreciation could put you into an entirely different tax situation and your tax professional NEEDS to know about it before they file your return.
So as you're putting your things together looking towards the end of the year take the time necessary to have all of your information together. If you're a client of A and R Accounting most of that is already being taken care of. If not, perhaps you should give us a call to talk about your options.
Have a great day!
Sean