Tax season is here, which means that many individuals and businesses alike are hurrying to get all their tax affairs in order before the 17th of April or whichever fiscal deadline your business needs to meet. While some businesses are able to get their taxes filed before the deadlines, others find themselves behind on this and have to file for a tax extension.
This gives businesses more time to file their tax returns, but it is in your business’ best interest to file before the deadline as not everyone is eligible for an extension and it is a risk you shouldn’t take. Fortunately, there are ways to prevent a situation in which your business would have to file for an extension.
1. Compile early: Tax season doesn’t happen unannounced; it is an annual requirement and while it is common for many people put off preparing for it until the last minute, you as a business owner should begin preparing to file your tax returns the year before it happens. This includes keeping all necessary records from day to day transactions as well as from all business dealings, both incomes and necessary expenditure. Besides keeping these records, it is important to also have them forwarded to whichever individual or firm is handling your business’ taxes. A common delay faced in the process of filing is the lack of some vital records.
2. Hire a bookkeeping service: As much as a business should keep all its necessary records, most businesses often struggle in this regard and find themselves scouring through piles of paperwork to obtain the relevant documents. To avoid this, your business should employ a bookkeeping service like BooXkeeping. A bookkeeping service will make sure that all records are kept impeccably and up-to-date. Besides this, they will also help in specifically keeping track of those transactions and documents that are relevant to a business’ tax. That way, when they are needed, they can be retrieved easily.
3. File early: Ultimately, the best way to avoid filling for a tax extension is to file tax returns as early as possible. All the necessary transactions and documents should be submitted to whoever is handling your business’ tax as early as possible and reminders should be made ahead of time to avoid delays. Filling for a business tax extension should be avoided as much as possible and in order to do that, professional help, due diligence and a lack of procrastination are key.
For more information on how you can have a professional help you get prepared for filing click here.