It’s Follow-Up Friday: Tax Advice for Late Filers

taxesOctober 15th wraps up another successful tax season!

What? You thought the last day to file was in April? Well, there are many people who are just getting their taxes in and for various reasons they needed to have more time. So in honor of the Tax Filing Extension, here are six tips to help late filers get ahead and beat next year’s deadline.

1. Schedule a ton of reminders.

Running a business is a big responsibility that can make you strapped for time. Before you know it a year has passed and another due date has come and gone. To never miss a tax deadline again try setting up alerts. Ones like this free email reminder prompts you for upcoming dates. Another tip is to write it in bold letters on your calendar so that the date stands out. Not good with calendars? Set up a monthly alarm on your cell phone until you have the taxes complete. 

2. Organize your financial files.

Make sure that all source documents are there. You should keep hard copies of customer invoices, bills, and payment receipts (click here to learn how many years to keep paperwork). After the hard-copy files are in order, put your bookkeeping on auto. If you have been putting off doing this yourself consider hiring someone else to do the job.   

3. Have an accountant review your work.

This is especially relevant if you have little to no bookkeeping background and manage the books yourself. This will ensure that transactions are in the right place and that you get every deduction that you are legally entitled to take.

4. Forecast the taxes that you expect to owe.

Depending on the complexity of your business, you may be able to estimate the tax amounts on your own. If you are not comfortable with do-it-yourself forecasting, ask someone who is good with numbers and tax rules to help you out. This benefits you by reducing the anxiety of not knowing if you will owe a hefty amount.

5. Set aside savings.

When you estimate how much you owe it prepares you to build up a cash reserve. This is money specifically for paying estimated taxes each quarter and any remaining taxes that are due. Be smart and keep tax funds separate from other accounts so that you are not left scrambling to make the payment.

6. Review your tax return from the previous year.

Look for savings that you missed. Since tax rules frequently change, be sure to keep up to date by reading and listening to the news to find out what deductions and credits are available. If you are not sure what applies to you prepare questions for your tax adviser before the year is out.

So remember when you track what you do on a regular basis, analyze your results, create a line item for taxes in your budget, and set savings aside to pay them, you can go confidently into the new year and file your taxes on time!

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4 thoughts on “It’s Follow-Up Friday: Tax Advice for Late Filers

  1. Thank you for the tips! One thing we do for our personal taxes is use the online Turbo Tax donation tracker, we donate a bit to Goodwill and the form breaks down the deduction and then is ready for tax time!

    • That is a very good resource. In fact, I have used it myself. It it quite accurate and saves users a lot of unnecessary time in estimating donation values. Thank you for commenting!

  2. Where were you when I owned my restaurant! LOL
    Great tips and extremely valuable. Thank you so much for sharing your knowledge.

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