Tax prep for small business doesn’t have to be painful. If you take steps throughout the year to keep your paperwork in order, the job gets even easier. Even if you haven’t had the time to stay organized, there are some tax prep steps you can take to ensure your business taxes get filed on time and correctly.

Gather your information for your tax prep

Whatever time of year it is, start collecting your financial information and organizing it to the best of your ability. This includes details on business income and business expenses, including receipts for all deductible expenses. If you have been tracking income and expenses using bookkeeping software (or a professional bookkeeper), this step won’t take very long. However, if you have the shoebox full of receipts on the bookshelf next to your desk, it’s time to start sorting through those and grouping them by category. 

Protect your personal data

Hackers and identity thieves love tax time because it’s a great time for them to steal people’s personal information.  This information is a valuable commodity. Every important piece of information about your life or business is compiled in one convenient location and often transmitted to a third party online. 

Do your research before submitting or releasing any personal information, whether it’s online or to someone who calls asking for information. The IRS doesn’t initiate contact with taxpayers by email, text messages or social media channels to request personal or financial information. Recognize the telltale signs of a scam. See also: How to know it’s really the IRS calling or knocking on your door. 

Be sure to use strong unique passwords and don’t send personal information via email. These protections may come at additional time and cost, but it’s nothing compared to the cost of a stolen identity. 

Know when to hire a bookkeeper for tax prep for small business

Many business owners make the decision to handle their own tax prep. Some even choose to file their own taxes using online software. If you don’t have the time or desire to hassle with tax prep — or if you want to be sure you’re maximizing deductions and filing the best return possible — consider hiring a professional bookkeeper to help.

A bookkeeper can help you sort through all those receipts and get them categorized correctly. They also know the ins and outs of tax guidelines, so they can help ensure everything is accurate while maximizing the deductions you can take.

Plan ahead for next year’s tax prep

If you’ve been through the scramble to sort the shoebox of receipts alongside multiple spreadsheets, you may be thinking about how to make it easier next time around. Work with a bookkeeper to set up your books to clearly align with deductible expense categories. Keeping your books current throughout the year is the best way to avoid the last-minute scramble for tax prep. Plus, with the help of a bookkeeper, you’ll always know where your business stands financially.  This makes important financial decisions easier throughout the year. 

Tax prep doesn’t have to be painful every year! We help many businesses and nonprofits stay on top of their books and be tax-ready.  Then they can easily hand off their financials to their accountant when it’s time.