Tax Time Was a Nightmare! How Can I make it Easier Next Year?
Tax Day 2015 has come and gone. Hopefully you’ve finished filing (or if not, hopefully you’ve filed a tax extension!) But taxes can be a true nightmare for online sellers, and one that lingers even after Tax Day has come and gone.
With that in mind, we’ve put together a few tips on things you can do now to make Tax Day a breeze in 2016.
1.) Automate your Bookkeeping – How do you currently keep your books? I know online sellers who use anything from spreadsheets to pen and paper to highly complex software that they can barely operate. This year, try a cloud solution like Quickbooks Online or Bench. Many solutions will automatically pull in anything from your business bank account to your credit cards to PayPal so that you can quickly and easily find all of your business’s transactions in one place.
2.) Automate Your Receipts – Did you find yourself searching for a shoebox full of receipts to try and figure out what that one mystery purchase from Best Buy was? (Was it a tax write off or a Blue Ray for the kids? Only the receipt from last February knows!) If this sounds like you, try a solution like Shoeboxed. You just stuff all of your receipts in Shoeboxed’s magic blue envelopes and they’ll scan them for you. From there, you can quickly and easily search them right from the cloud. If you don’t want to pay for a subscription service, try a nifty portable receipt scanner from Neat Desk. No more searching through that old pile of odd-sized receipts.
3.) Consult with Your Accountant – Tax time shouldn’t be the only tie you see your accountant. In fact, the season between January and April is probably the worst time to consult with your accountant because she’s busy with taxes. To tax plan for your business, make an appointment now, when her workload has lightened considerably.
4.) Start Keeping Mileage Records – Auto expenses can be a large business tax deduction, especially for online sellers who may spend a lot of time traveling to source products, ship items or meet with partners. But this deduction also requires lots of recordkeeping. Start now so that you can take this lucrative deduction next year. Here’s more about how to get started with the mileage deduction.
5.) Give Your Business’s Finances a Monthly Checkup – One of the main reasons that Tax Day is such a burden is that you’re dealing with a whole year’s worth of information. But if you give your business a monthly financial checkup, you can ensure you are tracking all of your income and expenses, keep up with tax deductions and head off any potential tax time problems at the pass. Schedule this once a month for less headache next April!
How do you make tax time less taxing? Let us know your secrets in the comments!