How to be ready for 2023 tax season

Six Tips to Start the 2022/2023 Tax Year Correctly

The majority of taxpayers wait until the eleventh hour to have a look at their tax situation. This creates unnecessary stress, forces you to hurry up, and makes your filing process susceptible to mistakes. As the new tax year is around the corner, we have come up with some tips to help you start off on the right note. 

1. Be proactive

Be smart, and start tax planning before the new tax year begins. Being proactive can help you get a clear picture of your finances, help you estimate your ARR, and ensure you're able to reduce your tax liability by making the right investments and claiming the eligible deductions. Waiting for the last moment for tax planning is the biggest mistake you can make, whether you are an employee or a business owner. Why? Because that way, you fail to make most of the available deductions, and in case you don't have sufficient funds at hand to pay off taxes, you have to pay heavy penalties. 

2. Organize your receipts 

If you're self-employed or a business owner, we cannot emphasize enough the importance of organizing your receipts. Firstly, preserved receipts help you understand your business expenses and make sure you get deductions on them. Secondly, you need the receipts in case there is a tax audit required by the IRS. When your digital and physical receipts are stored in an organized manner, it makes tax filing seamless. 

3. Don’t ignore bookkeeping 

We know bookkeeping is not an interesting job, but it's essential to keep your business running and thriving. With regular bookkeeping, you get to know the financial health of your business, you can assess better which expenses you should cut down and which areas you should spend more on, and you won't have a hard time when it's finally the tax filing season. Whether you have an in-house bookkeeper, use bookkeeping software or outsource bookkeeping from an expert service provider, make sure it's a task that's on your priority list, right from the beginning of the year. 

4. Start saving for taxes 

Saving a certain percentage of your paycheck is a seamless way to save for taxes. When you follow this rule, you don't have to worry about not having ample funds to pay off your taxes. How much you should keep away depends on your total income after claiming the available deductions and which tax bracket you fall into.

5. Mark tax deadlines on the calendar 

So that the tax deadlines don't slip your mind, mark them on the calendar earlier in the financial year. Businesses often get caught up with the excess workload and find themselves under immense pressure when it's time to pay taxes. Taxation—from planning to paying taxes—is not a single task, rather it's a process, and a pretty lengthy one. So knowing your deadlines earlier gives you the time to chalk out a plan with your tax consultant. Paying taxes on time takes a huge load off your shoulders, as you don't have to worry about penalties and extra charges, and you can make the most of available deductions, tax credits, and refunds that you might be eligible for.  

6. Consult a tax professional

Doing taxes can feel overwhelming, especially when you already have huge responsibilities on the work front. Hiring a tax professional gives you one less thing to worry about. A certified tax expert will assist you with tax planning, bookkeeping, maintaining payroll, paying off old IRS debt, keeping a tab of deadlines, and making the filing process smooth. 

If you're looking to start the upcoming tax year the smart way, reach out to Accountants Now, and make taxation hassle-free.  

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