14 Jan Avoiding Tax Time Anxiety: 3 Things That Will Change How You Deal With Tax Time Forever
“It’s late 2015, the small pile on your desk is glaring at you, the words 1099 make your stomach turn, you are avoiding your bookkeeper and you accountant keeps sending big packets of paper check lists and calling. You are avoiding your desk. April 15th is a long way away you think to yourself “I have time”, yet you are still anxious. Every year it is the same thing and you hate it.”
Does this sound familiar? Is this you? It doesn’t have to be. Building a great team, having a simple to-do list, and know what your true deadlines are can all make this process so much easier, faster and dare I say cheaper. The big question then becomes where to start.
The first, thing to do is to decide who your team is and how much help do you need. How much help you need depends on your size, complexity of your business transactions and time allowances. Everyone should have at least two key people. The key people are the person who will prepare your taxes and the person who is going to help you get your pieces together. Businesses should have a CPA (certified public accountant) or tax attorney with some well-vetted credentials and referrals, and a support person that helps them stay on track who is most likely a bookkeeper. Larger businesses will need in-house controllers, bookkeeping staff and even a tax preparer. I good measure of where you need to be is if the work isn’t getting done my the deadlines, or the information being produced isn’t useful, it is most likely time to upgrade. The tax preparer will often be a Certified Public Accountant or “CPA”, but may be a registered tax preparer or tax attorney. They are often the most expensive member of your team. They are also the tightest for time. You want to use this person for tax advice and planning, to prepare the tax forms and to be the last person in your checks and balances. It is not efficient or economical to use this person as your personal business coach, whip cracker, or bookkeeper. If you are struggling to get your documents and accounting together, there are less expensive resources. Your CPA will also appreciate not having to be the driving force behind your business taxes being filed in a timely and accurate manner. It is human nature to avoid the difficult. If you are a difficult customer your CPA will most likely leave you to last. If you have been on extension year after year you are the difficult client. This is costing you money with the government and with the CPA. Change things now and save money now it is as simple as that. The CPA or tax preparer should not be the evil man behind the curtain that makes you cry with each call. If your tax preparer has ever used foul language in an email to you, or not returned a call it is time to trade up. The bookkeeper or accountant (not certified public) is the other important team member. This person or people are going to provide varying degrees of support but can be the driving force behind completing things not only in a timely way but in a way that is efficient and get your business useful management information along the way. Ideally you don’t call this person once a year to jam all your receipts and bank statements into a file but in some businesses that is all that is really needed. This team member should be proficient with your chosen software, have a good working knowledge of accounting and be familiar with the tax codes that affect you. This person should come armed with a set of procedures in mind, a year end to do list and a checklist of things to provide the accountant. The idea here is to have less to manage, figure out and remember. If you have to actively manage this person, and train them on taxes then they aren’t saving you any time, money or frustration.
Now don’t think you are completely off the hook. This bookkeeper or accountant may have a to-do list for you especially if they don’t work with you on a regular basis. They will have a list of items they need such as purchase paperwork for assets, loan statements etc. Responding to their requests quickly will keep the ball rolling and make this working toward you life being easier. The to-do list will vary depending on how much help you have procured. If you have a bookkeeper or accountant you will have a short to do list provided by them that outlines what they need to complete their work. If you are doing a fair bit of the work yourself and just have someone that checks in on you and looks over your work your list may be much longer. A great way to get a ready made check list is to ask your tax preparer if they already have one. All people who prepare taxes should work from some kind of list to make sure all the elements of the business have been addressed and items aren’t overlooked. Their list may work for you so that you now in advance what information they need. At Fogged In Bookkeeping we work from a universal list we have developed and keep one for each customer. If we can pull together a few hundred customers tax information then you’re doing one company should be pretty manageable. So what if it isn’t well that is when you go back to the first step of your team. If working from any list is overwhelming and exhausting then it is time to reevaluate who your team needs to be.
Lastly, find out what your deadlines really are and put them on the calendar. If your CPA needs your information no later than 2 weeks before the filing deadline then you need to know that. The deadlines for various forms such as W-2s and 1099s are not guidelines they are deadlines so if they apply to you write those on your calendar as well. Pretending they don’t exist will only create more anxiety.
Best of luck with your 2015 taxes. If you would like a sample checklist just sign up for the newsletter and we will be sure to get you one!
No Comments