FSC First is dedicated to offering innovative and effective business financing options to both emerging and established companies. Our Level Up program offers an array of business solutions and coaching, enhancing our support for business growth and development.
As the year approaches its end, it’s essential for businesses to thoroughly review their financial status in preparation for tax season. Key steps should be taken before December 31st to ensure financial records are accurate and complete. Hope Brown, MSA, is a recurring speaker at FSC First Level Up events and the Founder and Owner of the Tax-Minded Bookkeeper. Her business provides virtual bookkeeping, tax preparation, Quickbooks Online coaching, and business consulting. Recognizing small businesses often miss crucial tax deductions due to inefficient bookkeeping, she focuses on optimizing tax planning and preparation.
Below, Brown has provided valuable advice to assist businesses in getting ready for tax season and maintaining sound financial practices.
1- Reconcile accounts in a bookkeeping platform. Businesses must update their books and integrate all financial information, whether they use QuickBooks or another software. According to Brown, relying on disconnected financial information like bank accounts alone can lead to guesswork. Therefore, incorporating financial data into a system will enable businesses to review reports and plan for the future, even as far as 2024.
2- Review trends in profit and loss statements to complete an analysis of the past year. “See where there were high expenses, low expenses, but analyze that even just to see if you can identify areas where you can control costs. Look for opportunities to reduce unnecessary expenses, maybe even negotiate better terms,” Brown shared. Analyzing by month will provide the best data.
3- Reach out for professional help to understand finances. Some business owners may not excel at interpreting financial data, but seeking out professional assistance can position businesses for success in 2024. Taking advantage of business financial coaching through the Level Up program can help businesses get started with a professional.
4- Tax planning is your friend. Ensuring deductions are properly claimed is crucial, and one effective method is through meticulous record-keeping. Accurate tracking is essential for significant areas like merchant fees and vehicle mileage. For example, Brown explained that the IRS mandates business owners to distinguish between personal and business mileage. Without maintaining yearly mileage logs, they risk losing the deduction and potentially thousands of dollars.
5- Ensure W9 forms have been received from all contractors. Brown emphasizes this is crucial for audit preparedness and informs the decision on whether a 1099 form needs to be sent to the contractor before January 31st.
Navigating the complexities of financial management and tax preparation can be a challenging task for business owners. With the expert advice and tips shared in this blog, you’re already on a path towards better financial health.
For more personalized guidance and support, don’t hesitate to reach out to FSC First. Our team is dedicated to assisting you in maximizing your financial potential, offering solutions that cater to your unique business needs. Contact us today to take the next step in securing your business’s financial future.