For many, tax time may conjure up visions of last-minute meetings, late-night number crunching and racing to beat the deadline to file a return. With tax deadlines right around the corner, however, it’s more important than ever to swap that hectic approach with one that is more measured, more strategic and more thoughtful.
Now is the time to make sure your finances are in order, recognizing that the journey to filing your taxes may feature some new twists and turns, thanks to the various COVID-19-related economic programs and tax tweaks that rolled out over the past year.
As you get ready to file your taxes this year, here are a few helpful hints from PADGETT BUSINESS SERVICES® to keep in mind:
- Get organized: Everyone has seen the images of people holding an armful of crumbled disorganized receipts as they prepare to tackle their tax returns. Don’t be that person! Make sure your files are organized in an orderly fashion, ensuring your taxes can get filed quickly and accurately. Remember to share your bank statements, invoices, inventory records, payroll information and anything else with your preparer. At Padgett, we share a tax organizer to help keep everything in order.
- Be mindful of the deadlines: Everyone thinks of April 15 as being the big due date for taxes, but some businesses are required to file earlier. S Corporation and Partnership tax returns are due on March 15, for example. If you feel like you might need an extension, let your accountant or tax partner know ahead of time so they can get that process started and you don’t run the risk of filing late.
- Know what taxes you’re responsible for: Whether you’re a business with a few employees or an independent contractor working with a couple of clients, be mindful of what taxes you need to pay. For instance, an independent contractor must pay both the traditional income tax as well as the self-employment tax. How you incorporated your business also can impact your tax liability, so it’s important to have a trusted tax partner to help you sort through what you will and won’t owe.
- Don’t forget about stimulus implications: The Paycheck Protection Program (PPP), as well as various other economic stimulus measures associated with the COVID-19 pandemic, will likely impact your tax liability. The most recent stimulus bill, for instance, now allows for the deductibility of business expenses paid with PPP funding, and it also increased the deductibility of meal expenses from 50 percent to 100 percent. Work with your accountant or tax partner to see what deductions and credits are available to you.
At Padgett, we have a robust, talented network of CPAs, Enrolled Agents and tax professionals who can help your business get ready for tax time. Let our team handle the stress of taxes for you. Find an office near you today and let’s set up a time to talk.