8 things to do NOW for a better Tax Season later

When the summer vibes are high, business Tax Season is the last thing on your mind. Honestly, I don’t blame you for that! It’s difficult to focus on the end of the year when summer is in full swing. Even business owners tend to forget about the end of the year when it seems so far away.

But, now is the perfect time to take a few moments of your summer to ensure that your spring (aka Tax Season) is a lot less stressful.

Even though another Tax Season might seem like a long time away, it’ll be here before you know it. So if you spend just 2 hours today, it can save you a lot of sleepless nights and stressful hours later.

That means now is the time for what I call a “mid-year check in.” It’s the time to ensure that when Tax Season rolls around, you’ll be ready.

Each year right about now, I do a mid-year check in to ensure that no matter what comes up next Tax Season, I’ll be ready. It usually takes me just a couple of hours, and sets me up for a successful tax season. And by “successful,” I mean a lot less stressful! 

But what does a “mid year check in” look like? Let me walk you through my process right here.

Here are 8 things you can do now for a better Tax Season later:

1-Go through through all your accounts and record all your Schedule A deductions on the personal side and the business side.

These could be things like medical, charitable donations, etc. Be sure that you’ve organized all your files and your bookkeeping is up to date. 

2- If you get a W2, evaluate your withholding on your W4 (or your partners). 

Did you get a raise? Did your home situation change? Are you having the right amount of money withheld to avoid surprisingly high tax bills? If you’re not sure how much withholding is right for your situation, try this handy tax withholding​ calculator to get a better idea. (And remember–owing the IRS is a gamble you will always lose. So prepare accordingly!)

3- Evaluate your estimated taxes.

If you are self-employed, you may be subject to paying estimated tax payments. Not sure if estimated taxes apply to you? Click HERE if you want an estimated taxes refresher.

4- Begin organizing your receipts and make sure your books are updated. 

Go through that pile of receipts and start getting them in order. Be sure you collect the business transactions, charitable donations, and medical records too. This will not only save you time, stress, and tears at the end of the year, but also get a handle on your tax projections. 

5- Update your accounting records. 

This is a GREAT time to update your Quickbooks file, or any other means you use to track business and personal expenses (especially since you just went through all your receipts right?) 

6- Update your mileage log.

You can use the MileIQ app (the app I recommend to all my clients, IRS approved) or the Quickbooks mileage tracking feature in the app. If you don’t use apps, be update your mileage in an excel tracking sheet. Include how many miles you drove, what the trip was for, who you met with etc. for a good audit trail.

7- Contribute to retirement accounts. 

If you are rocking a profit this year, consider moving some of that income into some retirement accounts. Not only is saving for your future cool, but it also has potential tax advantages. Be sure you talk to a professional if you aren’t sure what the tax advantages/limits/available options are in your situation. (If you aren’t sure what the best options are for you, let’s see if we can help you out)

8- If you filed for unemployment so far this year and received it, be sure to set money aside for taxes.

Remember that unemployment is taxable income, and you will receive a 1099-G. Even if you elected to withhold the 10% it might not be enough. Be sure to consult with your accountant if you have any doubts there! 

All this only takes around a couple of hours, and it leaves plenty of time for chilling by the pool when you’re done.

Don’t let this years tax season bring you to tears! Set the groundwork now for a low-stress Tax season, and you’ll be glad you did.

If you need advice, consulting, or additional support, you can sign up for an on-the-fly consulting session HERE.


AND, until next time…

Love, light, and MONEY, Honey…

Kaylee

P.S. While you’re doing your mid-year Tax Season check-in, take the time to ensure you’re getting all the Tax Deductions you’re entitled to. My handy Tax Deductions checklist can help!

Grab yours here and learn more about what you can deduct, what is NOT eligible for Tax Deductions, and which ones apply to your business. Get that HERE!