Peak Performance: Tips You Can Use
Volume 7,  Issue 2
February 2015
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February 2015 
Western Veterinary Conference
QuickBooks Workshop 
Las Vegas, NV

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Lorraine's Corner





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5 Tips to Make Tax Season Less Painful

It's that time of year, when a young man's fancy turns to love and your CPA's mind turns to taxes. When you hire a CPA to prepare your tax return, and most of you should, there are a number of actions you can take in advance of meeting with him or her that will speed return preparation and possibly help reduce the preparation fee. That's a win-win if ever we heard of one. With that in mind, here is a list of actions you can take to make your CPA's life a little easier. 

  1. Reconcile all of your bank and credit card accounts. Life has never been busier, and it is easy to get a month or two (or three??) behind on bookkeeping. Not many of us like doing it - there is nearly always something more interesting that demands our attention. But if you haven't reconciled these accounts, there may be bank fees or miscellaneous charges that haven't hit your books. Need more motivation? These are tax deductions waiting to happen! If your accounts aren't reconciled, your CPA won't know about these expenses and thus won't deduct them from your income.
  2.  When you reconcile your accounts, review "uncleared" transactions (both payments and deposits), particularly those that are stale-dated (three months or older). Frequently, these items are duplicates of transactions that were reconciled at the time. If a credit card charge from April 2014 hasn't hit your books, you can safely "void" it and clear the transaction the next time the account is reconciled.
  3. Provide as much information as you can in a single batch. And, please, not in a shoebox! Gather payroll records, inventory reports, the annual sales summary from your practice management software, year-end statements for bank accounts, credit cards, loans  (including student loans), equipment leases, mortgage statements, tax notices, W-2s, etc. Did you buy a piece of property last year? Provide the closing documents to your tax preparer. Spend 15 minutes sorting the documents into piles of similar things, clip them together and put a Post-It Note on top stating the category. If you do not use a veterinary accountant, you may know more about what records belong together than your CPA does.
  4. Don't wait until March to plan for last year's taxes. Work with your accountant throughout the year to take advantage of tax planning strategies. When you buy a large piece of equipment, talk to you CPA about the best way to record the purchase. Do family members work in the practice? Your accountant has recommendations about how and how much to pay those family members. By consulting with your tax advisor throughout the year, you reduce the likelihood of having an unexpected balance due.
  5. Most business tax returns are due March 15th. If your accountant doesn't pre-appoint, make an appointment in February, as soon as you can pull together all your year-end documents. When you meet with your accountant, they will probably send you home with a list of more information they want to review. With an appointment in February, there will be less of a scramble to find and submit those documents before the March 15th deadline.

As you can imagine, February, March and April are a tax accountant's busiest months of the year. No matter how great your accountant is, you won't receive the attention you deserve if you wait until the last minute to submit your information. Don't delay. If you keep good, organized records throughout the year, you can spend March skiing down the mountain, not holed up in your office digging through a mountain of receipts.