10 Smart Steps to Prepare Your SMB for Next Tax Day

April 15 was Tax Day for millions of Americans in 2024. However, many did not have to file their returns on that day as they were automatically granted extensions for various reasons. Moreover, if you were a last-minute filer, you were in good company.??

Like every year, most Americans waited until the final hours of 2024 tax return calendar to file their returns. Tens of millions more returns were filed during the final days, and the agency paid out over $200 billion in tax refunds through early April.?

Preparing for taxes is time-consuming and complex. Moreover, the hassles can increase if you leave everything for the last minute. On the contrary, taking the time to get all the details right can help you avoid issues down the road and ensure you receive all the deductions you are entitled to.??

Having all the required information at hand makes the tax preparation process easier and filing smoother. Here are ten smart steps to prepare your SMB for the next Tax Day.?

Ten Smart Steps??

Step 1. Track Receipts and Expenses?

To simplify taxes and maximize deductions, it's crucial to check your records first. Therefore, keeping track of expenses and receipts throughout the year is essential. This allows you to easily access them during tax time.??

You should hire an accountant for your small business and review records with them once everything is in place. The accountant can help you understand eligible deductions and potential savings.??

Step 2. Review Changes in Tax Legislations?

As a small business owner, preparing for Tax Day can be challenging. This process may seem more intimidating, especially for first-time entrepreneurs. One essential item on your checklist should be reviewing changes and new tax legislation.??

Small business owners should particularly review deductions allowable for their business type, as these deductions can help save a significant amount of money. Therefore, it's important for every small business to hire a financial advisor and discuss legislation in advance.?

Step 3. Schedule Advance Meeting with a Finance Expert?

Tax planning shouldn’t be left until the tax season; instead, it should begin long before taxes are due. Entrepreneurs can plan for the best options by staying on top of tax projections throughout the year.??

Therefore, it's essential to hire a finance expert well in advance and provide them with all the necessary documents and access to prepare your return. Schedule a meeting to discuss all tax strategies in advance to avoid last-minute surprises.?

Step 4. Give Your Accountant Full Business Visibility?

A doctor must understand everything about your body and symptoms to treat you properly. Similarly, an accountant must know everything about your business to offer you the best tax advice. Therefore, after you hire an accountant for your small business, it's crucial to engage with them.??

Your accountant should have access to the full financial picture of your business. With comprehensive oversight of your business financials, they can suggest the best strategy to claim all possible deductions, create a solid investment plan, and devise the right strategy for business revenue growth.??

Step 5. Check Monthly Tax Liabilities and Cash Flow?

It is essential to periodically check your cash flow and tax liabilities. Accounting and bookkeeping are crucial systems to maintain the health of your business. Therefore, you must hire a finance expert to oversee and maintain your books. Additionally, scheduling monthly meetings with the expert to review your business’s tax liabilities and cash flow position can help you stay up to date.??

Step 6. Be Clear about Your Deadlines?

It is essential for you to have clarity about deadlines. Forgetting or being unaware of your filing deadline can result in significant failure-to-file penalties. For example, if your business has transitioned to an S-Corp, your filing deadline is a month earlier than that for single-member LLCs or personal taxes. Therefore, it is crucial to hire a financial advisor and regularly communicate with them to stay informed about your filing deadline and other pertinent details.??

Step 7. Gather and Organize Needed Documents?

It is critically important to ensure that you have all the information and necessary documents on hand. This includes receipts, invoices, income statements, and other financial documents. Organizing these records properly for ease of access and understanding is essential.??

By preparing these documents early, you can have a stress-free and smooth tax season. You can hire a QuickBooks expert to assist you in this regard. They can help organize all the necessary documents and assist you with filing.??

Step 8. Have Sufficient Cash on Hand?

It is equally important to have the funds to pay your taxes. Before creating a cash flow forecast, consider estimating the taxes owed. Avoid spending the money prematurely and then facing a situation where you don’t have enough funds to pay your tax bill.??

Step 9. Standardize Processes to Reduce Financial Risk?

Your organization can become leaner by following standardized processes. Standardizing everyday processes ensures consistent results every time, leading to a steady revenue flow and reduced financial risk. Additionally, creating detailed process documentation helps align your team to execute tasks efficiently.??

Step 10. Connect with a Remote Staffing Solutions Provider?

Hiring a financial advisor, finance expert, or accountant locally can be costly. Reduce expenses and access top talent by partnering with a remote staffing solutions provider like Remote Resource. They offer access to the top 10% talent pool at a significantly lower cost, without legal and compliance hassles. Connect with them to hire top talent today.?

Summing up?

Every year, countless businesses wait until the last moments to file their returns, often missing out on major deductions and benefits. In the preceding pages, we've outlined ten smart steps for small businesses to prepare for the next Tax Day.??

By following these steps, businesses can stay prepared and avoid last-minute hassles. Connect with us now to learn more and keep following our page for further insightful discussions.??