5 Things To Do Post-Tax Season
The weeks following tax season are a time for small business owners to exhale, knowing that the dirty work is finally complete. But what many don't realize is that post-tax season is the perfect time to get organized, plan, and prevent any financial mishaps that occurred the previous year.
1. Speak Up
It may seem obvious to talk to your tax professional, but surprisingly few people actually communicate with their tax professional about anything besides filing taxes. Once your taxes are finished, follow up with whomever you filed with to discuss improvements for the following year. Tax professionals can offer a wealth of knowledge to anyone who simply takes the time to ask. Make a list of questions or concerns about anything that confused you. Even if you don't have any major concerns, getting to know your tax professional can save you time and problems in the long run. Someone who knows about your circumstances and any major changes happening in your life is already prepared to help. If you anticipate any big changes in the next year, mention them to your tax professional now and get advice.
2. Make Upgrades
You may not want to even think about investments after tax season, but it's actually the perfect time to consider upgrades and additions to your business. Any glaring financial or operational errors from the previous year are still fresh in your mind, which means you are best equipped to handle it. Consider any technology that would've made tax season easier, such as filing systems or financial organization apps. Cloud and SaaS apps are revolutionizing the way businesses function, providing easy access to data and important documents. You may even want to consider hiring a professional to assist with finances if you don't have someone already. Accountants, financial advisors and analysts can provide a clearer picture of your money situation and guide you through complex business decisions.
3. Set Goals
While tax season is often thought of as a time of headaches and anxiety, post-tax season can be a time of clarity with the right mindset. Small business owners can use this time to set goals and decide on the direction in which their business should go. You may be wincing at your financial shortcomings, but instead of kicking yourself, you can make a detailed plan to do better. The important thing to do is make sure your plan is concrete -- come up with specific objectives, not just overarching goals.
4. Estimate, Adjust, Budget
One of the most critical things for business sustainability is knowing where you stand. You can't get to your destination if you don't know where you are now. Look back on any projections you made the previous year. Were they over, under or spot on what you expected? A business owner's worst fear is owing way more in taxes than they thought they would. To avoid this, you can start making changes at the start of the new tax year to ensure everything runs smooth. Pinpoint areas where your budget may need to be cut down and identify any expenses that were unnecessary or ineffective.
5. Schedule a Review
Yes, we already talked about the importance of talking with your tax professional now. But what about in 6 months? A mid-year check-in can give you the peace of mind you desire well before April. Don't try to work out all of the details a month before taxes are due. Instead, get into the habit of making financial management a year-long process. This may sound like a downer, but in reality it provides business owners with freedom and empowerment. Rather than being a victim to tax season, you can be an active participant in your business' financial health.