For most small businesses, the few months of the year means preparing for the tax season. They have to finalize the previous years’ invoices, receipts, and other documents for tax filing. However, before you meet with your accountant to prepare your tax returns, here are a few things you should know regarding the tax season 2017.
About the Tax Season 2017
The most important thing that you should keep in mind is that the deadline for filing taxes has been changed this year. The filing dates of Partnerships and S-Corps have been moved up, while C-Corps’ filing dates have been pushed back.
The due date for Partnerships (Form 1065) and S-Corps (Form 1120-S) has been pushed up from April 15 to March 15. Also, the filing date of C-Corps (Form 1120) has been pushed forward from March 15 to April 15.
Make sure that you keep the new deadlines in mind when preparing for the current tax season. Small businesses that miss their deadline for filing taxes will have to ask for an extension from the IRS. That being said, the taxes are still due on the tax day even if the IRS grants an extension, and any money owed to tax collection agency must be paid.
Tips to Prepare QuickBooks Online for Tax Time
QuickBooks Online (QBO) can make the process of filing taxes super easy for the accountants. Almost everything that you need to enter into the tax returns will be available in the QBO accounts. But you need to ensure that the accounts accurately reflect the transactions carried out during the year. This is a critical step. Otherwise, if the IRS finds any errors such as missed transactions during an audit, you will have to pay a hefty fine.
The first task that you should do is review the accounts and ensure that they correctly reflect actual transactions. Make sure that all the credit and cash transactions are entered into the accounts. Also, you should review the accounts and ensure that the transactions have been categorized correctly. Here are some of the other things that you should specifically look at when reviewing the accounts.
- Transactions recorded to uncategorized expenses and income
- Duplicate Transactions
- Old balances in the account receivable and payable,
- Old balances in the undeposited fund’s accounts
Next, you must review the profit and loss report and balance sheet to ensure they accurately reflect the transactions entered. Also, don’t forget to reconcile and update the bank account.
Once the above steps have been completed, call your accountant to prepare the tax returns. Remember that taking these steps will make the tax process straightforward and uncomplicated. You will save your accountant time and you will save money. It will also ensure that tax file doesn’t contain any errors, thereby, avoiding the need to pay the large fine to the IRS.