It is important to prepare your business documents to avoid any last-minute hassles that may come up when the time comes for filing tax returns. Preparing for tax time throughout the year will not only save you a lot of money, but also a lot of time that you can use doing other productive activities. Rushing during the last minute can mess you up big time and be required to pay extra money to other individuals to assist you to reconcile the needed information. Triplog is an effective car tracking app, that not only helps you track your automobile’s mileage, but also your business records and other transactions that come in handy when filing taxes. Here are tips you can use to prepare for your taxes throughout the year.
Track Your Mileage
Uber and Lyft, as well as other rideshare drives, can benefit a lot from tracking their mileage. Mileage deduction’s claims average up to $6500 per year. Drivers are now able to use this innovative app to have clear records. You simply begin tracking in the morning and then end when you retire in the evening. The app will compile and analyze that data to generate a special report.
Check Your Financial Statements
You need to keep monitoring your financial statements to ascertain the financial position of your business. Three most important documents to keep checking are the income statement, balance sheet, and the cash flow statement. These statements will give you a glimpse of your future tax forms, that will enable you to compare your existing finances with previous returns and help you determine whether or not to make some changes.
Keep Personal Records Separately
It is helpful and important to keep personal finances separate from business transactions. Avoid paying your expenses with business money and vice versa. If possible, open separate bank accounts and run them separately. Mixing the two will give you a rough time when the time comes to file your returns. It will be very difficult to pinpoint the various transactions if you do not separate them from the beginning.
Reconcile Bank And Business Statements
Establish a schedule of comparing your business record of accounts with their corresponding bank statements. These records should balance out every other time. The process helps you identify any possible errors as early as possible and have them corrected. The process also helps to save time since you will not be required to carry out such activities during file returns and also minimize the possibilities of reporting wrong numbers.
Keep All Your Records In Order
Many small businesses tend to misplace some of their business records. Losing such documents might cost you a great deal while trying to get the same from various institutions. Ensure that you have a folder where you can store all of your bank records, invoices, receipts, and other important records. With the advancement in technology, you can scan most of these records and have them stored on your computer. Keep the paper records as proofs. Organization is key here, whether you keep an analog or digital system.