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We’re all familiar with the tax season hustle – getting all of your paperwork in order, scheduling appointments with your tax guy or gal, and praying you don’t owe an arm and a leg to the IRS. This is a pressing time for small business owners, especially those that tend to be less organized all year round. But what about post-tax season, when the dust has settled?
We typically sigh in relief once taxes are filed, not thinking much about them until the following April. But there are actually several things you can do to smooth out the process for next year. Post-tax season is the perfect time to get organized for the future and assess the previous year, especially if business tends to slow down in the summer.
Scope out improvement opportunities
Part of excellent strategic leadership is planning. So set aside time to talk with your certified public accountant (CPA) or tax guy or gal about possible changes you can make. Remember that tax professionals are busy and will probably not divulge a ton of information unless you take the initiative and ask. Take this opportunity to get clear on any gray areas, like new business assets or expenses you’d forgotten.
Another aspect of planning is searching for savings. Can you do better at tracking deductions? Are there any you’ve missed? In addition, you might look into a SEP-IRA (Simplified Employee Pension) or similar program for your employees. Any small business owner with at least one employee, or any freelancer, is elegible to open a SEP-IRA.
Assess your tax estimates
Set aside some time to reevaluate and adjust your tax estimates from the previous year. Maybe they were roughly what you expected, or maybe you owed significantly more or less than you thought. Always be aware of your bottom line and make adjustments to your estimates that align with it. The worst thing is to be caught off guard, so make estimates early to prevent problems down the road.
Implement an organization strategy
Organization isn’t everyone’s forte. If you know it’s in your nature to let clutter consume your workspace, be proactive. What is the easiest and most straightforward way for you to organize your paperwork? What is simple and sustainable for some professionals may be a total hassle for others, so do what works for you. Maybe you want to move to a digital filing system, purchase an organizer, or tweak the setup of your workspace. The Simple Parent offers several strategies for keeping tax documents in order all year round.
Find a payroll service
Even if your employee list is short, you’ll want to consider getting help with payroll taxes. In fact, payroll is more complex for businesses with just a few employees than it is for larger businesses. Even if you only have a few independent contractors, a payroll service can still assist you in hiring them, paying them and managing their tax details. If you already have a payroll service, consider whether their work has been satisfactory. Do they make your life easier, or do issues frequently pop up? If you’re not happy with them, post-tax season is the time to make a quick switch before more headaches ensue.
Schedule a mid-year review
It’s ideal to schedule a review sometime during the summer to make sure you’re on the right track.
“At this meeting you should provide a profit, loss and balance sheet, discuss your business plans for the year, and comment on any business trends you are noticing that will affect your tax liability for 2017.”
– Bonnie Lee, author of “Taxpertise, The Complete Book of Dirty Little Secrets and Hidden Deductions for Small Business that the IRS Doesn’t Want You to Know“
Tax season may feel like a burden, but by fulling taking control of your business you can reduce stress and prevent surprises. If your usual post-tax season routine is ignoring your finances, try taking a more proactive approach this year. Reach out for help, make changes early, and stay organized during the year and your next tax appointment will be smooth sailing.