Planning ahead for tax season pays off. Whether you’re chugging along on this year’s taxes or all done, here are a couple tips you can apply to prep for tax time, any time of year.

Set Money Aside Ahead of Time

I’ve spoken with many business owners who’ve told me they regretted not setting aside money for taxes. Some also tell me they were initially surprised by the additional self employment tax. Clients often come to me after they’ve been hit with the tax bill. At this point, we have to pay off the tax debt and save for this year’s taxes. Doing both is tough, and can make a real financial mess for new business owners. 

To solve this problem, I recommend two things. First, work with a tax preparer or bookkeeper who will help estimate a percentage to be held out for taxes. You can read more of my advice about working with a bookkeeper here. Putting money aside will help avoid that nasty surprise.  This can also be a precursor to implementing the Profit First system, which is designed to keep your business prepared to pay its expenses, and pay you a fair wage.

If you want to go the extra mile, you can also read my article 5 Steps to Prepare for Tax Time. Although recovery from this type of situation needs to be thorough, it’s a chance to implement new and better systems and get your business organized.

Learn to Read Your Quickbooks Reports

Bookkeeping is essentially a simple process, but it requires attention to detail. Whether you DIY your bookkeeping or work with a professional, hours can be saved by learning to read your QuickBooks reports. This can help you double check whether you’re entering everything correctly, or whether there’s any mistakes. Sometimes when I work with clients, we have a big mess on our hands that can be traced back to a few minor errors. Reading your reports regularly helps prevent this! If you’re interested in learning more, I offer QuickBooks trainings and love helping small business owners understand their finances better.

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