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Year-Round Tax Preparation: A Comprehensive Tax Guide for Businesses

Tax Preparation

As the year is about to end, it is time to set personal goals, such as staying healthy or saving money. As a business owner, it's crucial to set business resolutions, especially for tax season. Although businesses can opt for hiring affordable tax preparation services, businesses need to provide the accountants with the paperwork they need to manage their taxes. Fastway Taxes and Payroll offers tips to help small businesses prepare for tax season, including tax returns and insurance services in Ontario. Read the complete guide to prepare for the upcoming tax season.

Organizing Financial Paperwork

Businesses must provide their accountant with all necessary paperwork for taxes, including financial statements, capital asset activity, a vehicle log, a summary of home office expenses, and Form 1098 for mortgage interest and property taxes. These documents should include a balance sheet, income statement, reconciled bank accounts, updated ending inventory, and a list of new and old assets. Vehicle logs should provide the total mileage driven for business purposes. At the same time, home office expenses should include utilities, repairs, maintenance, home insurance, mortgage interest or rent, and the closing statement from the purchase date.

Preparing Employee Forms

New deadlines for filing W2 and 1099 forms have been set, with employees having until January 31st to provide their W2 forms and subcontractors with their 1099 forms if they were paid over $600 in the past year. To complete these forms, businesses must provide the necessary information, including the name, address, zip code, state tax identification number, employee compensation, federal income tax withheld, social security wages, Medicare wages, tips, and dependent care benefits. For the 1099 forms, the contractor's information must be provided, and the contractor's contact information should be obtained before payment.

Reconciling Year-End Finances

To prepare for tax season, keep track of all business-related expenses receipts throughout the year. This will enable your accountant to review year-end finances, including profit and loss statements, employee records, and business loan balances. This information can help identify trends and identify miscellaneous expenses that can be eliminated. It's essential to keep business and personal receipts separate when organizing receipts, as this will help in managing your finances.

Review the Deductions

Small business owners can benefit from various tax deductions during tax season. These include travel expenses, business supplies, advertising and promotional expenses, taking career classes, charitable donations, retirement fund contributions, and tax preparation expenses. It's crucial to track receipts for business-related travel, business supplies, advertising, and certification courses to claim deductions. Additionally, discussing other deductions with an accountant can help ensure a more accurate tax return.

Consult Expert Accountant

Schedule an appointment with your accountant to ensure you are on top of the paperwork and understand the steps needed for filing your small business's taxes. This is especially important for first-time business owners, as tax code changes constantly and can be challenging to understand. Your accountant can guide you through the process of cataloging receipts, filing forms, and preparing taxes, preventing costly mistakes and keeping you aware of deadlines for payroll, sales, and income tax.

Prepare for Tax Season with Fastway Taxes and Payroll

Fastway Taxes and Payroll offers financial and tax support to small local businesses, including accounting, bookkeeping, taxes, and payroll. As local businesses, they understand their clients' needs and goals, providing personalized assistance. Their staff is available to discuss their needs, and they don't charge for questions. This makes Fastway Taxes and Payroll an asset to the business community, focusing on cultivating positive relationships with clients.

Prepare for Next Year

Prepare for next year's tax season by establishing a sound system for organizing receipts and records. This will make filing taxes easier and save you time and effort in the coming year. For over a decade, our clients have trusted us for accounting, bookkeeping, and taxation needs. We offer specialized services for small-medium businesses and students, ensuring financial expertise makes their lives easier.

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