If you’re in business, guess what – you’re either an accountant by default or you need to hire one. Why? People ask this question while letting the year roll until taxes are due. Oh no Why do I have fines?
Simply, you are not an accountant and you should have hired it. So the first rule in business accounting is to hire one if you are not one. The second rule in business accounting is to hire an accountant to review your accounts before filing taxes.
Most people starting a business are not aware that the application deadlines for businesses and small businesses are different from personal filings. While personal tax returns are due in April. Business and business tax returns expire in March. His often leads to many late charges and so on, which are associated with late filing of penalties.
Keeping good records is another concern for most new business owners starting out. Many new business owners do not understand the tax code and do not understand what can be written off as an expense and what cannot be written off as an expense. These small errors will also lead to penalties and additional fees associated with your filing.
Be sure to keep all receipts or online order forms for later reference and keep them organized. There is nothing worse than the end of the year sorting festival. Receipts are lost and records can be incomplete if not taken seriously. Understand the power of the organization and the process of organizing your records. Keep them close!
Charity benefits must also be closely monitored and accounted for by both parties. The philanthropist and charity both need to get a receipt and have good records. If you give time, keep good logs of your time and have the charity you donate to accept and sign for your log. You need a receipt!
Warning! Be very careful not to produce or provide false deduction information. If you claim a deduction, make sure your records are in order and that you are prepared to be questioned if such questions arise. The practice of over filing expenses with the federal government and making records is a federal offense and can lead to legal consequences beyond penalties and fines.
In fact, you may be imprisoned for producing all the information about your taxes. Go to jail for bad journaling? Now is a bad way to end a financial year.
Keeping track of money coming in is as much of a problem as keeping track of money going out. Simple keeping of bank statements can go a long way in keeping things on track for your new business. Keep them in a “safe” place, preferably a fire safe if possible. Remember, all responsibility rests hard on your shoulders and not on anyone else’s. The federal government doesn’t care if your building burns to the ground before the tax year is over. You are still responsible for your taxes and the consequences for not filing can be costly.
Good accounting software should be your first stop if you plan to keep your own accounting records. There are several packages out there, some are expensive and some are cheap. Choose one that best meets your needs, not the biggest just because it seems to be the most expensive or the one with the most features. Remember, you have to learn how it works to keep good records. So keep in mind your own personal limitations when purchasing accounting software.
Finally, if you accept cash, you must document the transaction with a receipt. Never take cash without a receipt and always claim your cash receipts at the end of the year. After all, the greatest mafia bosses and organized criminals of our time were not prosecuted for murder or the other heinous crimes they were responsible for. They were jailed for not filing taxes on cash earnings.
A good accountant can help you avoid fines and over-taxation. Hire one, they are worth every penny in the long run.