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It’s that
time of the year again! If you were having trouble with your taxes back in
April you might have filed for a tax extension. This handy little process let
you have a little more time to fill out your paperwork and get all your taxes
in order. It’s a little breathing room in an otherwise stressful and terribly
strict ordeal every business owner must go through.
So why are
we reminding you of this like we did last year? Because you may not have
noticed, but there isn’t too much time left to finish your taxes before the
extension runs out! October 15th, the tax extension deadline, is
just around the corner and there are no more extensions left.
Remember
that you already paid what you estimated to owe (hopefully you did anyway), you
just need to finish your paperwork. This means you may end up owing a little
more or even get some money back. You won’t know until you get started – which,
again, should be right now!
Organization
We talked about organization last year, but we wanted to go into a little
more detail this time. Maybe you tried to get everything in order last year and
it just didn’t work out or the whole thing fell apart shortly before you did
taxes (hence the extension). Whatever the case, it’s time to try a filing
system that works.
Keep in mind
if you forget income the IRS will tell you in no time flat. If, on the other
hand, you forget about a deduction or two, they are not going to go out of
their way to remind you. It’s up to you to get all that stuff in order so you
make sure to include it in your filings.
- Income
- Deductions
- Capital Items
- Credits
- Prior Year Tax Returns
If you’re
struggling to get a real system in place, these headers can get you started.
This system can also maintain you the rest of the year so you don’t have the
same problems next year. Just make sure to put every single piece of paper that
comes through the business into one of those folders or files.
Deductions/Credits
It’s one
thing to make those folders and put neat little headers on them, but it can be
entirely different thing to actually find paperwork to put in them. The most
overlooked sections are undoubtedly the deductions and credits sections. It’s
easy to recall the money you brought into your business but recalling every
single purchase is tough.
That’s why
it’s so important to have a good system in place. If you can reach into your
deductions folder and bring out all the times you bought gas to drive to a
convention, it’s easy to file compared to trying to find receipts located all
around your house.
One of the
biggest of these to investigate is the home
office deduction, which only works if you have a dedicated office space in
your house. Why is it so important? Because not only is it a significant tax
deduction, it can lead to others, like deducting utilities.
Another hint
is to go through your calendar and think of any big changes you went through –
moves, hospital visits, etc. These can help you remember more deductions and
credits you’ll want to include when sending in your taxes so you don’t pay the
full amount the IRS will surely come calling for.
October 15th
is flying up fast, but we’re confident you’ll get your tax extension in on
time. While you’re at it, why not make sure your 2013 transactions up until now
are organized? Getting a head start will make April 15th next year a
little easier to swallow, too. Good luck!
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