5 Ways to Make Filing Your Business Tax Return Easier

Businessman going through documents with magnifying glass and calculatorFor W2 employees without many additional sources of income, filing a personal tax return is relatively simple. But if you’re a business owner, your personal tax return can get quite complicated—and then there’s the business tax return to consider. Filing a business return is an entirely different ordeal when compared to filing a personal return, and it can be enough to give you more than a few gray hairs. If you filed to extend your business tax return, your new deadline is just two weeks away, so it’s time to get down to business. Here are 5 tips you can follow to make filing that return easier.

Digitize All Your Receipts

Keeping track of all your vendor receipts is a nightmare, especially if you’re trying to keep paper copies of them. These can get lost very easily, and when it comes time to prove your business expenses, those missing receipts can cost you a lot in tax deductions. Digitizing your receipts can make it much simpler to organize and keep documentation of all of those expenses.

This can be as simple as taking a picture of the receipt with a cellphone, or scanning the paper into your computer system. Keep receipts in folders that are organized by months, at the very least; it’s far better to have subfolders for types of expenses or even for specific vendors that you use frequently. This makes it easy to find the receipts you need if you need to verify any of your expenses for your tax return.

Use a Cloud-Based System

While you’re digitizing all those receipts, make sure that you’re putting all of your relevant financial documents into a secure, cloud-based system. Not only does this make it easy for you to find the information you need from anywhere, but it also makes it easy for a tax preparer to pull up the information they need to complete your tax return. Again, make sure those files are clearly organized so that any tax preparers or bookkeepers you use can find information quickly.

If you are using a tax preparation firm, many of these businesses—including ours—use their own secure client portals, allowing you to upload sensitive financial information with total confidence that your data is protected.

Know Your Deductible Expenses

Many business expenses are deductible, but not all of them. It’s a good idea to know in advance what expenses qualify for a tax deduction and which ones don’t. While it’s a good idea to track all of your business expenses, regardless of their deductibility, knowing which ones are deductible can allow you to better categorize your expenses to make tax filing simpler. If your expenses are broken down into deductible categories, you can easily find your total deductions when it’s time to fill out your tax forms.

Limit Your Credit Cards

The fewer places you have to look to track your expenses, the easier it is to gather the information you need. Keep your business expenses on only a few credit cards, so you can easily compile everything you need for your taxes. This reduces the odds of having lost expenses that could have been an additional tax deduction for your business.

Make Your Bookkeeper Your CPA

By far the easiest thing you can do to simplify your business tax return is to make your bookkeeper and your tax preparer the same person. When your CPA is also the one preparing your business’s books, you don’t have to worry about passing along the correct information when tax season rolls around. Your CPA will already have access to all of the financial information for your business, and will be able to access it and prepare your tax return with minimal effort from you.

By reducing the number of people handling your financial information, you reduce the risks of your data falling into the wrong hands while also minimizing the odds of incorrect information ending up on your tax return. When the person preparing that return is the same one who maintains your books, it’s much easier to ensure that everything on your taxes matches your business’s spreadsheets.

If you’re looking for a CPA who can also provide you with business bookkeeping services, contact Demian and Company, CPAs, today to schedule a consultation with one of our financial experts. We can help you to quickly prepare your business return, then provide you with ongoing bookkeeping and tax preparation services for the future.