2 Ways to Mess with the IRS

A CPA, CMA and self-described "cashflow maven" explains how to expedite your tax savings plan with a pair of super-easy pointers.
2 Ways to Mess with the IRS
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Entrepreneur Leadership Network Writer
President of The Cash Lab
2 min read
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Do you hold your breath while waiting to hear your tax bill each year without ever speaking with your CPA or Tax Expert?

Your tax bill is always more predictable if you take the right steps early. But if you're reading this, the bad news is you're already late. The upside is I've got you covered with two quick tips to absorb before April arrives.

Related: Still Haven't Gotten Your Stimulus Check? Here's What to Do

1. Better bookkeeping

Good bookkeeping impacts every area of your business and will impact your decisions and strategy.

* Ask yourself: How many months are left to be updated? Do you have all your supporting documents ready or will you have to search for key supporting documents?

* Remember to make sure your bank reconciliation is also being updated with all amounts accounted for – both payments and receipts.

* Ensure the Chart of Accounts  (how your business dealings are categorized) is current and properly reflects the various transactions of your company. 

Each type of transaction in your business will have varying tax rules and reporting requirements. When transactions are not reported in the correct category you risk losing key benefits or credits. 

When transactions are missing and not recorded in your business that will also impact the taxes paid. Each missing expense results in a corresponding missing credit or deduction depending on your rate. Setting up your business to ensure effective systems exist will seek to minimize your risk of missing transactions and paying more than you want (or need) to pay.

Related: How to Give Yourself a Tax Cut

2. Reach out to a professional ASAP

Pay a little to the pros so as to avoid paying a lot to the government. Here's what to ask a tax expert...

* Are there are any changes in the laws which will impact your business? Do you need to do anything, right now, to qualify for any credits or deductions which are applicable? How will any final purchases/expenses or payouts such as dividends impact my tax bill? 

Tax planning is where you work with an expert to develop strategies on saving. Your bill is dependent on your business situation, environment and government rules/regulations, so you need a clear defined game plan. 

Pay less by organizing effectively.

Related: What to Know When Applying for a New PPP Loan By March 31

 

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