Get On Top of Your Taxes: How Accounting Can Help You File Timely

Tax season is here, and the thought of filing paperwork can be overwhelming for those who dread it. But by staying on top of your taxes and understanding how accounting can help you, you can make the process easier and ensure you get your return on time. Managing taxes can be a daunting challenge, especially if you are unfamiliar with the rules and regulations. Thankfully, professional accounting and bookkeeping services providers have the knowledge, tools, and experience to help you navigate this ever-changing landscape. In this blog, we will explore the essential role accounting plays when it comes to managing your taxes.

About Business Taxes

There are a lot of different taxes that businesses have to pay, and it can be difficult to keep track of them all. Tax and accounting go hand-in-hand, as accounting is the basic step of filing accurate taxes. Accounting can help you stay on top of your taxes and ensure you are paying them on time.

There are federal, state, and local taxes that businesses have to pay. Federal taxes include income tax, payroll tax, and self-employment tax. State taxes vary by state but can include sales, corporate, and personal income taxes. Local taxes can include property tax and business license fees too.

To stay on top of your taxes, you must track when they are due and how much you owe. This can be a lot to keep track of, but an accountant can help you stay organized and pay your taxes on time.

When it comes to filing your taxes, a few different options are available. You can do it yourself or with the help of your in-house accountant using IRS Form 1040, or you can hire an outsourced accounting and bookkeeping services provider or tax preparer to do it for you. Doing it in-house might be the best option if you have a simple return. However, if your return is more complex, it might be worth hiring an outsourced service provider to help you out.

No matter how you file your taxes, accounting can help you stay on top of them and ensure they are filed on time.

Benefits Of Hiring an Accountant for Tax Preparation

While most business owners believe they can handle their own taxes, there are plenty of benefits to hiring an accountant for tax preparation, be it in-house or outsourced. Perhaps the most obvious benefit is peace of mind. Knowing that a professional is handling your taxes can take a load off your shoulders and allow you to focus on other things.

Another benefit is that an accountant can help you maximize your deductions and minimize your tax liability. They know the ins and outs of the tax code and can help you take advantage of every deduction and credit you are entitled to. This can save you a significant amount of money come tax time.

Finally, whether you hire an in-house accountant or rely on an outsourced virtual accountant, they can help you stay organized throughout the year. This is especially helpful if you have a complex financial situation or own a business. An accountant can help you keep track of expenses, income, and other important financial information, so that come tax time, everything is in order and ready to be filed.

Common Tax Forms and Their Purposes

You may need to file a few different tax forms, depending on your specific financial situation. Here is a rundown of some of the most common tax forms and their purposes:

• 1040: This is the standard tax form where sole proprietors are required to report their incomes and losses.
• 1065: The owners of partnerships or LLCs (Limited Liability Corporations) are required to report the profits, losses, deductions, and credits of their businesses in this form.
• 1120: Corporations must report their earnings and losses to the IRS via form 1120.
• W-2: This form is used by employers to report an employee’s annual wages and withholdings. Employees will receive a W-2 from their employer at the end of the year.

Strategies For Filing Timely Tax

Tax is something that is prone to changes from time to time, and it is crucial to stay updated about all the changes to file the taxes accurately and avoid any penalties or fines. Since the data required for tax filing is obtained from accounting and bookkeeping records, properly managing these processes is important. So, to maintain the reliability of the records and get the data on time, you can hire help from an outsourced accounting and bookkeeping services provider that offers accounting and tax services.

Besides ensuring the accuracy of the tax filed, it is also necessary to file your taxes on time. Late tax filing can attract penalties and even notices from IRS. Therefore, it is best to stay prepared for the tax season by following some simple strategies. Some strategies for filing a timely return include:

1. Use accounting software: There are several excellent accounting software programs available that can help you keep track of your finances and ensure you don’t miss any important deadlines. Accounting software such as QuickBooks, Xero, NetSuite, etc., offer robust features and integrations that can save you time and make filing your taxes easier.
2. Stay organized: When it comes to taxes, organization is key. Keep track of all relevant documents throughout the year, so you are not scrambling to find them come tax time. A good way to do this is to create a dedicated folder or binder for your tax documents. That way, everything will be in one place when you need it. However, using automated tools has reduced the need to store physical files. It is best to save your important documents in the cloud server using cloud-based accounting software.
3. Hire an accountant or tax preparer: If you are not confident in your ability to file your taxes independently, consider hiring an accountant or tax preparer. A professional can help you create a filing plan, ensure accuracy in your return, and may even be able to find deductions and credits you otherwise would have missed. While hiring help from professionals, it is more beneficial and cost-effective to hire an outsourced service provider or a virtual accountant offering accounting and tax preparation services instead of in-house personnel.
4. Check the deadline: Take note of the tax filing deadline for your area and make sure to file before then. Also, remember to check if your state has any special rules for tax filing, as some states may have earlier or later deadlines than the federal government.

Tips For Understanding Business Taxes

There are many different taxes that businesses must pay, and it can be difficult to keep track of them all. Here are some tips to help you understand business taxes:

Federal, state, and local taxes may be applicable to your business. Make sure you know which taxes apply to your business.

Talk to an accountant or tax specialist to understand what you should be paying. They can help you understand the tax laws and how they apply to your business.

Keep good records of your income and expenses. This will make it easier to file your taxes and avoid any penalties.

File your taxes on time. If you don’t, you may be subject to interest and penalties.

By following these tips, you can stay on top of your business taxes and avoid any stressful surprises come tax time.

Conclusion

In conclusion, getting on top of your taxes is important to ensure you stay compliant with the law and avoid unnecessary penalties or interest. Accounting can be a great help when it comes to filing your taxes in a timely fashion. With the right accounting professional and the right strategies, you will have no trouble navigating your way through the annual tax maze. Understanding how accounting can help you file on time each year is key to living without worrying about receiving unexpected fines from the government regarding tax payments due.

If you are looking for an outsourcing partner to help you prepare for the tax season and avoid late filing, you can contact us to help you with your accounting and bookkeeping processes. Whiz Consulting offers quality accounting and bookkeeping services to businesses from different industries, ensuring their books are in order so that they can file timely and accurate taxes.