These past few years have changed many elements in our lives, some with significant implications to your taxes. Having a child, loss of employment, government changes, and of course, the effects of Covid-19 all play a significant role this tax season. It’s difficult to keep up with all the shifts and to know how they apply to you. Keep reading for five simple tips on how to stay on top of your taxes.
How Do I Prepare for Tax Season?
It might be tempting to stall, pushing the management of your taxes to “later”. Instead, planning ahead can eliminate worry and uncertainty. If, for example, you’re just now tending to your taxes and realize you owe more than you anticipated, jumping on it now gives you a chance to file for an extension…though you still must make the estimated payment on time to avoid penalties and interest. A professional tax planner like Ashlee will help you avoid surprises and stress. In the meantime, Ashlee advises:
- Be Proactive. Outside of regular tax season is the time best time to proactively ask yourself important questions such as: “What changes happened this year that we should assess? Have you had children? Started a business? Gotten married?”
- Create a Payment Plan. A CPA helps you project your quarterly tax payments, alleviating the stress of coming up with one big payment at year-end.
- Key Indicators. Key indicators, such as how much you owed in taxes last year can help you anticipate your liability this year.
- Accounting. Organized and informed bookkeeping throughout the year will keep you ahead of the game, with a timely assessment of your expenses – making tax season a lot less stressful.
- Continuing Education. A great way to learn is by listening to others’ experiences, especially someone in a similar industry. For invaluable knowledge on best practices in tax preparedness, check out some webinars or other great resources here.
Okay, So What’s the ONE Thing I Should Be Doing?
If you are to do one thing to prepare yourself for tax season – make it bookkeeping! Be consistent and organized in your approach to gathering bank statements and receipts, EVERY MONTH. This is key for growth and scale – vital to making good business decisions. Having accurate bookkeeping is critical to becoming profitable, minimizing your tax liability, and helping you reach your financial goals.
Be sure to check out Ashlee Brooks from Brooks & Associates Tax Consulting Services. Ashlee has over ten years of experience and will soon celebrate her first year as CEO of her own tax consulting firm. She is here to teach you how to minimize your tax liability while growing your business. Don’t forget to check out the full video on our Youtube!