What You Need To Know About Tax Season
It’s that time of the year again, where there never seems to be enough hours on the clock to do everything you need to do. We are of course talking about tax season. The season can be a trying time for those who are caught unprepared. This is why we wrote down a few things we thought you should know about hiring bookkeepers to help you this coming tax season.
Hiring a Bookkeeper Reduces Stress
We have seen too many people wait until the very last minute to gather their paperwork and hire a bookkeeper to prepare everything for the accountant. When you wait until it is almost too late, you accumulate unnecessary stress. Not just for you but for your bookkeeper and accountant as well. You also increase the risk of having to pay penaltie
Hiring a bookkeeper ahead of time allows them to carefully gather and go through and organize your paperwork. A good bookkeeper knows how to write proper journal entries and record the day-to-day financial activities of your company. Without good books, your tax professionals won’t be able to properly do their job further elevating everyone’s stress levels.
Bookkeepers Can Save You Money
Tax preparation is a process that happens year-round. A good bookkeeper will be crucial to avoiding last minute mistakes due to procrastination. But bookkeepers handle far more than just the basics of tracking profit and loss - they can also save you serious money. Here are a few ways they can do that:
Deductions - bookkeepers help identify and provide proper documentation support for deductions that qualify as business expenses. A good bookkeeper will track your expenses at all times and address issues as they happen, so when tax season comes around, you will have the information on hand.
Record keeping - year-round detailed record keeping is absolutely critical to your tax filing, especially if you own a business that might be at risk of being audited by the IRS. The right bookkeeping partner will help your company file accurately which saves you from penalties and fees.
Accuracy - account reconciliation is one of the more valuable services a bookkeeper can provide. This means aligning specific transactions on your credit card or bank statements with corresponding transactions in your accounts. Accurate tax filings are only possible with accurate records. Bookkeepers can uncover anomalies or errors that otherwise might not have been found, this prevents last-minute delays in tax filing.
Accounts - a good bookkeeper will advise you to keep your business and personal expenses separate, especially if you are running an LLC or corporation. Mixed accounts can invite unwanted attention from the IRS and complicate the tax process, depending on how much information needs to be unraveled. As a general rule, accounts that are separate offer better protection from legal liability.
Bookkeepers Can Save You Time
This tax season, it is estimated that you will spend anywhere from 80-100 hours on tax preparations, especially if you are doing it alone. Tax forms, purchase receipts, itemized deductions, return filings, the list goes on and on.
Professional accountants and bookkeepers utilize tools to streamline their jobs. The better the tools, the easier it is to get everything organized and accomplished. For example, cloud accounting apps can be a smart investment. The cloud allows accountants to work almost anywhere and with any device. This is most beneficial during tax season where they might need to access their client’s data remotely.
If you have waited too long to start planning, this could lead to mistakes and missed opportunities to save time and money when filing. Bookkeeping is a year-long endeavor, if you don’t have the time to be a bookkeeper, you need to get one right away.
Hiring experienced professionals can save you money, time, and stress. To schedule a free consultation, please click here.