Welcome to the Tax Insights Podcast, where we break down complex tax topics into bite-sized how-tos. In this episode, Jeff Dvorachek explains the intricacies of preparing and organizing your finances for the end of the year.
Discover practical ideas, from dedicated business accounts to the strategic use of credit cards, ensuring a smooth and stress-free approach to your financial endeavors in the coming year.
In this episode of Tax Insights Podcast, Jeff shares tips on making financial record-keeping and tax filing easier for you as a business owner. Acknowledging the transition from 2023, Jeff highlights the significance of early tax preparation to ensure a smoother fiscal journey. Let’s dive in.
Host: Jeff, it’s a new year, 2024, and we wanted to take a moment on today’s program. Let’s make sure we’re off to a good start. Obviously, we’re already into January, but let’s talk about things that business owners or individuals should be thinking about to make sure that 2024 is a good year for them from a tax perspective.
Jeff: Yeah, I think what businesses start to think about right about now is, “Alright, we’re past 2023, and I have to start getting my taxes ready to get them done.” And I really didn’t keep track of anything in 2023. So it makes sense that, as you’re working on your 2023, let’s get a good start on 2024. And there’s a number of ways that you can do that that’ll actually make it easier on you as a business owner.
Host: Alright, so give us a few of those ideas, a few of those ways and how to, but you know, perhaps say, he said, keep track of some of that stuff.
Jeff: Yeah, surprising as it is, there’s a lot of small businesses that just run their checkbook out of their personal checkbook. Maybe they’re doing something on the side, like Etsy or Airbnb. And so really, they just consider this to be a little bit of side income. In order to keep track of that income, what I always recommend is just establish a business account that’s just in that business’s name, where you put all of your business receipts into that account and you write all your checks or do all your credit cards out of that same account because it’ll help you at the end of the year, having one place to go to kind of gather all the ins and outs.
Host: Absolutely. I think sometimes people think that, “You know, I’ll just kind of do that at the end of the year,” but the reality is that only causes more stress and more work at the end of the year. Therefore, if you start off well and start off right, it’s going to save you time and money later on.
Jeff: Exactly. The other thing I talk about with our clients, Terry, is, you know, establishing either a business debit card or a business credit card. And trying not to use cash because cash tends to get lost when you’re looking at the end of the year. You don’t know what you spent your cash on. But if you use the debit card or credit card, now you have that receipt. You have that monthly statement that you can go back to and say, “Oh, yeah, I bought this or I sold that.” And obviously, if you are using a credit card, make sure that you have the cash, the revenue to pay that off then in full so that you’re not hitting and paying all those interest fees.
Host: You’re right. Yeah, it’s really important for cash management just to use that credit card more as a record-keeping thing rather than a loan.
Host: Right. Absolutely. Jeff, these are great ideas, great ways, great reminders for everyone. You know what? Now is the time to start going into the year and making sure that you’re doing things the most efficient way to save you time later on because, at the end of the day, the reality is, the end of the year is going to come, and you’re going to have to do all this again. Taxes are going to be due. Therefore, get yourself ready now.
Jeff: Yeah, you’re right, Terry. You know, a lot of business owners, they really like to run their business but they don’t necessarily like the accounting side. So sometimes we got to push ourselves to do that part too. And that’s why you got to surround yourself with experts like Hawkins, Ash.
Host: Jeff, if listeners want to get connected with you guys and maybe have a conversation to figure out how you can help them and their business, whether it is a side business, whether it is their main business, whatever it may be, you guys are there for everyone. What’s the best way of connecting with you guys? I would go to our website, which is Hawkinsash.cpa. And if you go to that CPA-HQ section, you’re going to see all kinds of articles, newsletters, and other resources that our firm puts out to help businesses.