Tax planning is one of the most essential processes for a small business to have in place, and the timing is everything when it comes to this part of accounting. It’s impossible to start planning too soon, especially if you’re running a business or have a lot of investments and other accounting demands on your personal taxes.
In reality, tax planning can be as simple or as involved as you like. Whatever works best for you or your company is how you should handle your tax planning. Many companies like to hire a Denver Tax Advisor or CPA to handle their planning and preparation for them, but if you’re doing it on your own or trying to decide when the best time to hire an accounting service, this article will help shed some light on your curiosity.
When & How To Start Tax Planning
Denver Tax Planning is a very influential course of action to take as an individual as well as a small business. Everything you do during the year can be considered part of your planning for tax season. Now, with the 2019 tax season rapidly upon us, you’re probably noticing the weak areas where you wish you planned a little better. Fortunately, you have a whole new year in 2020 to remedy those mistakes, and you’re about to learn how!
Phase One: Filing
The biggest benefit to your tax season is honestly the smallest effort. In order to have a stress-free, functional tax preparation and filing experience, you should begin storing and filing your related documents as soon as the new tax year starts. Having an easy to follow but very specific filing system for storing records and expenses is the best way to begin planning for taxes, and it can be done as soon as January 1st.
All successful tax planning systems operate on a filing system. If you run a business, make sure all of your accountants and anyone who deals with the financial aspects of your business follow the filing system correctly and all records are kept track of. At the end of the year, this cuts down a lot of searching for lost receipts, forms, or documents.
Phase Two: Identifying
Learn more about the deductions you may qualify for, and how you can ensure to meet the requirements. The IRS has many deductions you may qualify for, but a few necessary steps may need to be taken during the year in order to really achieve this by tax season.
This is where an advisor or CPA can come into play. Most companies try to come up with their plan for deductions and the necessary requirements early on in the year, or before the business even comes into light.
Phase Three: Hiring
Finally, it’s time to get your tax plan put into motion. If you’re going to be hiring an accountant or Denver tax advisor to do your planning and preparation for you, the sooner the better. Allow yourself plenty of time to have meetings with your advisor, as well as come up with some trial-and-error processes for planning for the tax season.