It’s November. The leaves are falling, holidays are approaching, and most small business owners are looking towards a pretty busy year end. The last thing on your mind is taxes. But it shouldn’t be. In fact, taxes should be a year-round activity! If you weren’t considering your tax situation until right this second, we want to give three really good reasons why you should be.
There is time to clean up.
I know. Bookkeeping takes a lot. But it’s a lot easier to take care of when there isn’t a tax deadline looming directly in front of you. Not only will preparation in advance give you some space to ensure that your financial reports are in order, you also give yourself time to talk to a professional about tax savings opportunities before the end of the year. Since most deductions will need to take place before 12/31, thinking about your accounting situation now will allow you to take advantage of those options before the year expires. Our clients appreciate knowing what they can (and can’t) do before it’s too late, and the impact of their decisions to spend in order to save on taxes. When we start earlier, there is more time to deal with any missing receipts/paperwork so that deductions won’t be missed.
Saving for the amount due isn’t sudden.
Spoiler alert: money can only live in one place at a time. And I’ve heard time after time from clients about the fear around having enough saved to pay taxes due when the “bill” arrives. When you consider tax planning a year-round activity, setting aside the right amount for taxes becomes part of your ongoing accounting practice. Not only will money have been set aside for taxes (therefore, not accidentally spent), you will also be gaining an understanding about how the income, expenses, and decisions that occur in the business ultimately affect the taxes due. Think about how much smoother tax season would be if you had a sense that the amount potentially due was in your control and prepared for.
You won’t be surprised.
So many people come to us near the tax deadline with no idea what their tax burden will be. It’s essentially, “I’ll find out when you complete my return.” But sit for a moment and think about the peace that comes with having an estimate well in advance, with much of it already having been paid. Not only do you avoid the shock to your wallet, you can also feel confident that you have paid what was owed throughout the year, avoiding the mental stress that comes with seeing that number for the first time when you see the return.
There is so much going on this time of year, and thinking about taxes is at the bottom of most people’s lists. Ready to give that brainspace to someone else? We’ve got you covered :)