| A tax preparation professional, such as a CPA, may | | | | disaster for your bookkeeping if you don't have a back |
| be exponentially more qualified and knowledgeable | | | | up system. Keep hard copies and paper records as |
| when it comes to navigating the tax code, but no | | | | well as digital backups of all your important documents |
| matter how good they are, they aren't magicians. In | | | | and be sure to backup your master spreadsheets |
| order to get the most mileage from your relationship | | | | periodically. |
| with a CPA, it's essential to have your bookkeeping | | | | 4. Create a clear audit trail. |
| organized and complete before you begin preparing | | | | Set up a system for monitoring daily, monthly, quarterly, |
| your tax return. Follow these five tips to help the tax | | | | and yearly transactions: for example, decide what |
| filing process along when April rolls around: | | | | financial processes you will use like balance sheets, |
| 1. Implement an efficient, organized bookkeeping | | | | bank statements, monthly profit and loss statements, |
| system from the beginning. | | | | and so on. That way, if there are ever any |
| April 14th is a bit late in the game to start getting | | | | discrepancies, you can quickly go through various |
| organized. By coming up with a day-to-day system for | | | | records to finding the missing figures. |
| organizing your transactions and finances from the | | | | 5. Set up a system for calculating income and |
| beginning, it'll make for a much less hectic time down | | | | expenses. |
| the road. Instead of shuffling through stacks and | | | | For example, what criteria will you use to work out |
| stacks of papers, keep a spreadsheet or folder that | | | | gross and net profit, and how will you differentiate |
| you can simply forward along to your accountant | | | | fixed costs like rent, electricity, and salary from variable |
| when it's needed. | | | | costs like advertising, commissions, and petty cash? |
| 2. Save everything. | | | | To answer questions like these, you may want to talk |
| After ringing in the New Year, financial institutions will | | | | to a CPA ahead of time so everything will be in order |
| start mailing you pertinent forms to your tax filing. Keep | | | | when it comes to file. |
| these safe in a specific folder or process them right | | | | Essentially, then, you want to create not only a balance |
| away. Likewise, plan ahead throughout the year and | | | | sheet as part of your bookkeeping but also systems |
| keep anything that might be essential when it comes | | | | for storage and retrieval of financial information. By |
| to filing your taxes (i.e. receipts for charitable donations, | | | | developing a smooth bookkeeping system you not |
| insurance papers). If you lose these important | | | | only make it easy for the tax preparer but you also |
| documents, it'll take a lot of legwork to get them | | | | avoid getting into trouble with the IRS for accidentally |
| replaced. Save yourself the trouble by hanging on to | | | | losing information that could be misconstrued as an act |
| everything that might be needed for taxes. | | | | of or fraudulent bookkeeping for the purpose of tax |
| 3. Back it up. | | | | evasion. Bookkeeping is more than a shoebox stuffed |
| Fires, break-ins, hard drive crashes - these can all spell | | | | with receipts and miscellaneous records. |