Not sure where to start? Big E-Z suggests the following steps to set you up for a new year of good bookkeeping:

Organize Tax Documents:

Gather and organize all the necessary tax documents from the previous year, including but not limited to:

• Income statements (such as 1099s or W-2s) from clients, employers, and other sources.
• Expense receipts and records, including invoices, bills, and receipts for deductible expenses like business supplies, travel, and meals.
• Bank and credit card statements related to business transactions.
• Records of asset purchases and depreciation schedules.
• Quarterly or annual payroll reports, if applicable.
• Any other relevant financial documents.

Update Accounting Records:

• Ensure that your accounting records are up to date and accurate. Reconcile bank accounts, credit card statements, and other financial accounts to catch any discrepancies.
• Review your profit and loss statement (income statement) and balance sheet to ensure they reflect your business’ financial performance accurately.

Stay Informed About Tax Changes:

• Keep yourself informed about any changes in tax laws or regulations that may affect your business in the new year. Tax laws can change from year to year, and staying up to date is crucial for compliance and optimizing tax benefits.
• Consult with a tax professional or accountant to understand how these changes may impact your business’ tax liability and what strategies you can use to minimize your tax burden legally.

Consider Tax Planning:

• Work with a tax professional or accountant to engage in tax planning for the upcoming year. This involves developing strategies to legally reduce your tax liability, such as taking advantage of available deductions, credits, and tax-efficient investment options.
• Determine your estimated quarterly tax payments and ensure you make them on time throughout the year to avoid penalties and interest.

Use Accounting Software:

• Consider using accounting software like Big E-Z or hiring an accountant to help streamline your tax preparation process. Good accounting software solutions can generate financial reports that make it easier to file tax returns accurately and on time.

Maintain Records for Auditing Purposes:

• Keep all tax-related records for at least seven years, as the IRS can audit your business returns within that timeframe. Proper record-keeping not only helps during an audit but also provides a clear financial history for your business.

By thoroughly organizing and preparing for tax season at the beginning of the year, you can minimize the stress associated with tax filing, reduce the risk of errors or audits, and ensure that your small business remains in compliance with tax laws while maximizing your available tax benefits.