Preparing for Tax Season

Getting organized for tax preparation may seem like a daunting task. But getting organized and working with the right tax professional can make the process more manageable.

Posted in Money & Credit on Sunday, February 28, 2016

If you haven’t started thinking about the taxes for your practice, then now is the perfect time to start.  Before you know it the April 15 deadline will be here.  While many tax planners and preparers would say it’s a little late to start planning, don’t worry. You still have time to get organized and get your return in on time.

Here are a few tips to getting started:

1. Work with a CPA or tax preparer. It isn’t uncommon for many small businesses to work with tax planners/preparers or a CPA all year long, but if you don’t have someone, now is the time. A professional tax preparer can answer your questions and help you better organize and plan for the next year. Need recommendations? Ask  your network of chiropractic colleagues or check with your local chamber of commerce for suggestions Be sure to find someone who has experience working with businesses similar to yours.
2. Pull your Profit and Loss statement for the past year. Most of the information you’ll need for filling out your return will be found here.  If your accounting is automated (for example Quickbooks, Quicken or another online solution) this report should be easy to pull. If your accounting is not automated, make that the number one goal for the next tax year.
3. Update all your financial information.
4. Review your deductions. The Small Business Administration (SBA) said the most overlooked deductions included items like depreciation of office equipment, out of pocket expenses, business related auto expenses, and office improvements. If you are uncertain of whether you can take a deduction make sure to ask your accountant or tax preparer.
5. Think about a payment plan. Again, your tax preparer and/or accountant can help you with this, but you will likely owe taxes on your practice. How do you plan to pay for it?  Have you been saving?  Have you been submitting periodic tax payments?  Will you pay in one lump sum?  Ultimately, if you need time, the IRS will work on a payment plan with you.
6. Don’t procrastinate. You’ll inevitably have questions and need to do some research as you’re preparing your return.  Make sure you leave yourself enough time.

Finally, start planning for next tax season. This means taking a look at what can be improved, collecting receipts and more planning.  You and your tax preparer will appreciate it.