How a Small Business should Prepare for the Tax Season?

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• How a Small Business should prepare for the Tax
  Season?
• A small business tax return is similar to a
  personal tax return where businesses report
  information regarding a company's income, tax
  preparation services, tax deductions, and tax
  payments. All businesses are responsible for
  filing taxes. You need to file taxes annually
  with the IRS to calculate your business tax
  liability.
• To prepare for an efficient tax season, small
  business can do the following things
• 1. Organize important tax documents
• It is important to document the tax papers for
  efficient tax returns. You need to file the
  following documents
• Annual payroll records
• Mileage logs
• A complete and up to date trial balance
• Any distribution from equity owners
• Any documents related to federal and state
  credits being claimed
• Documentation of any federal or state tax
  payments made
• Details of loans and advances
• Repayments between the business and owners
• Any payments made through the account or credit
  card that were not recorded in the company
  records
• Name, addresses, FEINs of vendors pid that may
  need 1099-MISC issued

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• Keep track of which account paid which bill
• Keep up-to-date accounting records such as bank
  records, credit card receipts, cancelled checks,
  invoices, business receipts, petty cash slips,
  professional services fees etc.
• Share responsibilities
• Use accounting software to keep track of the
  business expenses
• Many of the small businesses struggle with
  staying on top of their bookkeeping throughout
  the year. You have to make use of accounting
  software such as xero, QuickBooks, freshbooks and
  wave financial to set yourself up for tax
  returns. The software makes it easier and ensures
  that you are keeping accurate records of
  business income and expenses.
• Hire an accountant
• Your accountant can do much more than preparing
  financial statements and filing taxes for your
  small business. Your accountant works with you
  throughout the year. They keep a track of income
  and expenses, they make sure you dont have a
  cash flow problem, and they also monitor profits
  of your business. Accounting is important for the
  growth and survival of your small business. An
  accountant can keep up with the ever-changing tax
  code and advise you on the best practices.
• Mistakes on tax returns can cause thousands of
  dollars in penalties and interest. To save
  yourself from IRS audit risk, find an accountant
  to help you with the taxes.
• Separate business from personal expenses
• Always get a separate bank account and credit
  card for your business and run business expenses
  through these accounts only. Otherwise, if the
  IRS audits your business and finds personal
  expenses mixed with business expenses. They could
  start digging on your personal accounts as well
  and no business wants to do that. Right!
• Be sure to file with state and local filing
  requirements

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wealth for your business. Reference -
https//ledgerbench.hatenablog.com/entry/2020/06/0
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