Small businesses are the biggest culprits when it comes to tax issues with the ATO. In most cases, negligence and poor planning may cause your business to pay fines, liens and other penalties associated with incorrect or delayed tax filings.
The good news is that you can future-proof your tax workflows to avoid delays and the stress that can make you pull your hair out. Simple tips such as planning early, taking advantage of technology, and auditing your books can help you prepare your taxes better and on time. Here are 4 tips to consider.
1. Keep all your files in one place
When handling physical tax forms, it can be frustrating to look for last year's return, employee wage deduction records, amounts paid to independent contractors and other relevant documents. You can save yourself the headache by creating a checklist of all forms necessary to file this year's return.
Use this list to gather all relevant records and keep them in a safe, accessible area. In this way, you can access what you need faster and avoid the last-minute rush that often results in mistakes.
2. Prepare for an audit
Auditing your books regularly can also help you avoid costly tax issues. An accountant can verify your transactions to ensure that no mistakes are present. They can also direct you to a reputable auditor if they don't provide this service themselves. A simple audit is a real-time overview of your bookkeeping practices and how they can be improved.
3. Go digital
You can't truly future-proof your tax records without going digital. Use software to fill in income, wage reports, contractor pay and other relevant information that's part of your tax return. Many online tools have digital versions of tax documents that you can simply plug numbers into.
You can also scan and upload physical documents, fill them out and run them by your accountant for accuracy. This process drastically reduces filing times and errors that you might make with physical forms.
4. Have backups handy
As with any digital records, you should always have backups of your online tax forms. Your tax preparation software may automatically store a copy of previous years' tax returns. However, you should also store your own copies offline (such as on an external hard drive that only limited personnel can access).
Backups help you maintain complete and accurate records that you can refer back to along with your accountant.
To learn more about handling taxes for your business, contact a business accountant like Marisa Gonzalez.
Share21 January 2020
Hello! My name is Hannah and this is my money blog. I decided to start writing about this topic after my recent visits to see a financial advisor. The advisor was able to give me lots of fantastic advice about how I could improve the state of my finances. I had been spending too much money and not saving enough and it was really starting to stress me out. Thankfully, by following the advice given to me by my advisor, I have now started to take control of my money. I hope you enjoy reading this blog. Thanks for stopping by!