It’s that time of the year again – tax season! What does that mean to a business owner?
Most business owners cringe because their 2016 New Year’s Resolution failed, as did 2015, 2014, 2013, etc. The resolution to be a more organized business owner failed again! Why did it fail?
Most likely, that resolution failed for the same reason for most people…to be more organized requires change. How often have you said you’re going to do better at something, but continue to get the same result? It’s because there was no change in the day-to-day living of life to get a different result. It’s the same for business owners when it comes to filing their taxes. If you didn’t change any behavior you’re not going to get a different result!
What needs to change? I don’t know because I don’t know you, but if I had to guess here are my top three:
- Keep your receipts!
- Use one calendar!
- Don’t mix your business and personal finances in the same account!
There are at least a dozen other guesses I could add, but I don’t want to be overwhelming!
Let’s expound a little on those three points and what to do differently to get a different result.
Keep your receipts.
The simplest method I recommend is to get twelve 9X11 envelopes. Label each envelope with a month of the year. Keep the envelope in a place where it’s easy for you to remember to put all your receipts in it. For some people, that’s their vehicle. For others, their office. It doesn’t matter where you keep the envelope as long as all your receipts get in the envelope. Receipts for expenses and for income – put them all in the envelope.
Use one calendar.
What does this have to do with filing your taxes? If you don’t use any mileage tracking tools all year long, having one calendar with everything on it will give you one place to go to figure out your business mileage for the year. There are many other reasons for keeping one calendar, but for tax purposes this is the prominent reason.
Don’t mix your business and personal finances in the same account.
This is a nightmare for a seasoned accountant. It’s not that difficult to have two separate checking accounts. It’s even freeing because you don’t have to try to figure it all out in your head!
To be a more organized business owner in 2017 remember do three things:
- Keep your receipts;
- Use one calendar;
- Don’t mix your business and personal finances in the same account.
Start today and next year at this time you won’t have the headache you have today or the foreboding feeling of trying to find everything you need to file your taxes! If you need help in any of these administrative areas, give us a call today at 618.741.8100