Even though you may not have completed your 2013 taxes yet, now is the best time to begin preparing for your 2014 tax return. This is because you can make decisions today with tomorrow’s tax implications in mind. As you sort through your tax data for 2013, you will likely encounter information that can help you make better decisions for next year. For example, you may identify certain expenses that you could have mitigated or income that should have been deferred. QuickBooks can assist you with making more tax-advantageous decisions for a better return next year. Here are a few ways to get started with the process.
Change Your Chart of Accounts
You may need to add, delete or change accounts to your Chart of Accounts in order to provide more accurate information and expense-tracking for your business. A QuickBooks ProAdvisor can assist you in this important process, as making changes of this nature may make a significant change on your income taxes. Using this service at the beginning is usually more cost-effective than asking a ProAdvisor for help after your accounts have become entangled for most of the year.
Create an Effective System for Estimated Taxes
Using monthly or quarterly financial business reports can help provide you with more information so that you can devise a more effective system in determining the amount of estimated taxes that you will need to pay. This is particularly important for individuals who are self-employed, who have to pay for the employer’s portion of Social Security and Medicare taxes. Opening a checking account and depositing enough funds to cover these obligations may help you be better prepared in case you need to pay in at the end of the year. You can also submit federal payments online.
Run More Reports on a Regular Basis
QuickBooks allows you to customize your reports based on the needs and activities of your business. Each report provides important information about your business. An automated expense report application is helpful when you have employees who travel often. Asking employees for their own reports regarding certain expenses can also help with the process, such as asking them to turn in receipts for travel or commuting.
Retrain a Bookkeeper
Some business owners are hesitant to bring in outside help for their business because of the financial commitment. However, sometimes retraining your staff can help them stay informed about tax changes so that you can minimize your tax obligation.