5 Strategies to Get Through Tax Season
Popular opinion: filing taxes is everyone’s least favorite thing to do, perhaps only bested by having a tooth pulled. Yet, like it or not, it’s that time of year again: Tax filing season officially began on January 27th. And before you know it, April 15th, the deadline to file, will be here.
We interviewed resident finance expert, Teresa VanderVeen, to get important planning and financial tips, tricks, and strategies that are guaranteed to help you, and your wireless business, get through tax season.
Let’s dive in!
1. Make a plan and stick to it
First things first: mark your calendar. The key is not only to start early but to plan ahead (read, not starting and filing in April).
Says Teresa: “If you’re unprepared, you’re giving future you a mental breakdown when the time comes: instead of being able to do it in small pieces and parts, you have to do a whole year’s worth of work at one times. And it’s hard to remember what you did in, say, January of last year.”
There are many important dates, including deadlines, to remember, but we marked the key ones to keep top of mind:
February 24th: Employees must be sent a T4 information slip by the last day of February following the year to which the information slips apply.
April 30th: CRA requires most business owners submit their tax returns by April 30th, or six months after their fiscal year if they observe a non-calendar fiscal year.
February 15th 2020: Deadline for businesses to give annual statements to recipients of specific payments made in 2019. Business can use the appropriate version of Form 1099. Form 1099 can be issued electronically with the consent of the recipient.
February 28th : Deadline for businesses to submit forms 1099 and 1096, if filing on paper. These documents relate to business transactions that aren’t covered by W2 (anything that falls outside of tips and wages – hiring an independent contractor, etc.). If filing electronically, the deadline is March 31.
March 2nd is the deadline for farmers and fishermen to file 2018 income tax return (Form 1040) and pay any tax due. However, you have until April 17th to file if you paid your 2019 estimated tax by January 17th 2020.
Most importantly, set a cadence.
“I recommend getting into a cadence when you spend an hour at the end of every month and documenting these things, or, if you don’t have that luxury, at least force yourself to do it once a quarter. Because then at the end of the year you’re not trying to remember 12 months; you only need to remember what you’ve done in the last month or three months, which is a lot easier to process than, say, an entire year.”
2. Make sure everything is closed out
“I always tell retailers when tax season comes is to ensure everything you needed to do last year is closed out.”
Are your purchase orders are up to speed?
Are all of your transfers where they need to be?
Are your inventory counts accurate, so you aren’t paying tax on inventory that isn’t in your store?
Did you get back all the money you were supposed to from RMAs?
Do you have your 1099’s in order?
What big purchases did you make last year that need to be written off?
3. Think differently about how to make technology work for you
There are tons of different accounting management technologies out there, from Quickbooks to simple mileage counting apps that can help you streamline processes come tax season. Teresa often challenges retailers to think about how they can use existing accounting software outside its intended purpose.
For example, think about the equipment that you purchase for your stores. Whatever system you’re using for managing your business, you should be able to create those large purchase items and check them into your system.
Take the same thing and apply it to your accounting software. Ask yourself, how can I use this to help me manage my assets and the things I need to manage long term?
Teresa says: “All technology is designed to do one or two things. But that doesn’t limit it to what it has to do, so think about the purpose of what it was built for, and also the value it can bring to you and then come up with a system (like tracking equipment purchases), little things that have big impacts that help you tweak it to meet other needs.”
4. Beware of scams
Teresa runs a catering business in her spare time and spoke to how her husband received an email from one of their small, local vendors stating they did their invoice wrong, that money was owed, and must be repaid immediately. He knew to take pause, reach out directly to the vendor to see if the notice was legitimate.
Turns out, it wasn’t:
“It’s about being aware, especially if you’re in the U.S. Fraudsters and scammers do a very good job trying to make sure their links look legitimate.
Living in a technology age, it’s everybody’s responsibility to take the time knowing how to recognize fraud. Since the Better Business Bureau and the FBI are always tracking them, so a simple Google search on “current fraud alerts” will do the trick. Remember: If you don’t know the person who’s sending you that email that has a link, don’t ever click on it.”
Scammers target people who are vulnerable and one may think it’s impossible to fall for a scam, but fraud organizations are highly skilled. Not only do they target vulnerable people but also those who are under pressure during a busy time in the workplace.
So, how can retailers protect themselves, and their stores, from fraud?
Says Teresa: “Making sure your employees and your customers are aware of potential scams. Informing your customers of fraud and the tips to identify scams is a great way to build trust, one can never assume their customers know.”
Read more here to learn how to protect yourself and your business.
5. Set up a routine
It only takes one hour per week.
Then you have time to give yourself a chance to do the other things you like doing. If you do start to feel overwhelmed, or your numbers are off, sometimes it’s as simple as getting up, walking around, having a conversation about something different for 20, 30 minutes it gives your mind the space to come back and look objectively for the thing your trying to find.
We asked Teresa what the most important takeaway for retailers is to become, and stay, more organized:
“Process, process, process! You’re less stressed when you’ve planned ahead.
From a retailer’s perspective, less busy Tuesdays are a great time to set up operational practices inside their stores of completing the pesky operational tasks done, such as organizing the storage room, processing return merchandise authorization (RMA’s). Consider creating a checklist and holding your team to it making sure they’re accountable.”
When you’re a busy retailer, trying to meet (and exceed) the rising expectations of today’s modern consumer, changing your retail technology is likely low on your priority list. Not only can you not afford any downtime with your retail software, you also don’t want to take your employee’s time away from selling.
But what if there was a solution out there that fit your business, prepared you for the future of your industry, and didn’t cause a headache when it came time to rollout?
RQ tracks inventory purchases, reconciliation transactions, sales data, is cloud-based and has Quickbooks and other integrations to help manage every facet of retail management. Get the whitepaper to learn more.