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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!
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.
If you need help organizing everything, try these categories:
- Capital Items
- 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.
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!