How to Make Next Tax Season Manageable
Even the mention of tax season can make entrepreneurs everywhere cringe. If that’s you every year, I’ve put together a way to transform this annual crunch time into something you won’t dread so much.
When people think of entrepreneurs, they typically think of people who might be ahead of the game. So why should you treat tax season any differently? Rather than waiting until the eleventh hour in the spring, it’s important you reach out to your CPA in the fall. Doing this alone can make for an easier tax season come springtime.
When you take the initiative to check-in on your tax responsibilities in the fall, you’re going to avoid being last-minute and gain a clearer understanding of how much you might owe. When you check-in with your CPA, you can let them in on any potential business plans that could be an implication for your taxes.
By staying connected with your CPA, you can get a clear picture of your upcoming financial landscape. And as the months roll by, you can make informed decisions about your personal and business taxes.
Most people wait until the year is over to gather all of their paperwork and sort through their expenses. This can quickly become overwhelming and take a lot of time. I recommend sitting down once a month, or even once a quarter to sort through all of your expenses and paperwork. That way, when tax season rolls around you’ll have everything you need (and you’ll even know where it’s located!).
It’s also important to note that your CPA is backward looking. That means, they are looking at your past financials from the year, and not at your future money situation. Many people assume CPAs can help with future financial planning, but that’s actually not their speciality. Instead, you’ll need a financial planner to help you plan and accomplish any future financial goals you’ve set for yourself, or your business.
Just remember, next tax season doesn’t have to be dreadful! The sooner you take initiative of your financial roadmap, the sooner you can say goodbye to the chaos of the springtime, and hello to a season of clarity, strategy, and empowerment.