So! You Filed An Extension – Now What?

Hello, world! Thank you for being a part of our amazing audience today. Welcome to another read on The Keys. It’s your favorite Money Motivator – Growth Instigator, Erica Fields bringing you the keys to your financial house!!

Many of us have filed tax filing extensions with the IRS this year. And the thought of completing the task haunts our most wonderful dreams at night. That box of receipts in the corner or the stack of bank statements that still need to be highlighted awaits us. Our tax preparer is waiting for us to complete this packet of paper they refer to as a tax organizer. If it was such an organizer why can’t it just do the work for us? Because that’s what the bookkeeping is for. And if you had that in place, we wouldn’t be filing an extension. Epiphany!

Where to Begin

Well, if you don’t quite have a bookkeeper or even bookkeeping software in place, then you’ll have questions. One will be “How do we even begin the process? Where is my income? And what I didn’t save all my receipts?  These and other questions can be answered with a few methods. Unfortunately, the bank and credit card statements from the tax year will need to be examined as mentioned above. It will help paint a picture of how you earned your income and what expenses you paid.

Other Expenses

You’ll also have hidden deductions. These are items like home office use, mileage, and certain actual vehicle expenses. Your tax professional will need certain data points from you to maximize your deductions for each of these. You should know the size of your house and the size of the office within used for business. You will also need your mileage log or system used to track business use of your personal vehicle. Other expenses related to your vehicle are important as well. Speaking with your preferred preparer will help identify these and other items.

Summary

The best defense for business taxes is a bookkeeping system. Even if you start with an excel workbook and filling system for receipts. This will make tax filing season much more efficient and help you avoid interest and penalties associated with extensions.


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