The end of the year is on the way, which usually means planning for the holidays and getting excited for the year ahead. But before you can start looking ahead, you need to put this year to bed, starting with your year-end tax planning.
It’s not a job that many people enjoy, but it’s something that you must do. In addition to helping you complete your accounts for the year, it can also help you look back over your performance and help you set your objective for the following year.
Organize your accounts
When you run your own business, the chances are you’re doing the majority of the work by yourself, and this includes your accounting. Getting your accounts organized will involve balancing your income and outgoings, your receipts and expenses and making sure you have all of the paperwork needed to file your taxes.
Fortunately, there is software that can help you with this. Accounting software will make it easier to manage all of your business’ finances in one place. TaxBit is ideal if you’re dealing with cryptocurrency, and other software can be easily integrated with your other tools and applications.
Using accounting software can help you develop better habits going forward to help you see your business’ finances in real-time.
Work on your deductions
You can use your year-end tax planning to help you establish your deductions and make the most of them. You can even defer some of your income to the following year to help you pay less tax this year. Understanding tax deductions and what you’re eligible for, can help you recover various costs and hopefully lower your tax bill. Be sure to hold onto all of your receipts throughout the year, or use an app that will scan and store them for you.
Assess your performance
By taking a closer look at your accounts, you can get a much better indication of your performance over the past year. This can help you set some new goals and objectives, but it can also help you identify the things you need to cut back on.
Are there expenses that you can cut to save money next year? Take a look at some common sources of overspending to help give you some ideas on where to reduce your own spending.
Work with an accountant
If you’re struggling to manage your own accounts, then hiring an accountant can help. An accountant specializing in small businesses will ease some of the strain of managing your finances and help you stay on track.
Dealing with your year-end tax planning is one of those tasks that seems worse than it is. By getting yourself organized and making sure you have everything in order, you’ll be on track. With things all wrapped up for 2020, you’ll be ready to look to the year ahead and start making some exciting new plans for 2021.