No matter how disappointing it may be financially, there is no getting out of the fact that every business has to file their NJ tax returns and their Federal tax returns on an annual basis. Most business owners actually pay more in Federal and State taxes because of simple bookkeeping mistakes. If you want to avoid the hassles and pitfalls of incorrect tax returns here are some tips to consider.
One reason why many businesses pay too much on their NJ tax returns and their Federal tax returns is because they do not have a proper bookkeeping system in place. Simple mistakes and misclassifications in payroll, inventory, sales and expenses can make a big impact on the financial reports used to prepare the returns. To avoid this issue, consider outsourcing your bookkeeping to an experienced bookkeeping service. A professional bookkeeper will be able to provide the numbers your accountant needs to prepare accurate tax returns. It also makes sense to outsource your bookkeeping because you don’t have the time or knowledge to do it yourself, it’s very difficult to find and locate a good in house bookkeeper and having your CPA/accountant do basic bookkeeping for $150 plus/ hour makes no sense.
Throughout the year make sure that you document all transactions related to your business, from copiers down to paper clips. Record the miles you use your vehicle for work to get reimbursed for its business usage.
The final piece to the puzzle of avoiding paying too much on your tax returns is to have a qualified professional prepare your tax returns. This should be either a CPA or an Enrolled Agent (EA’s are Federally licensed tax professionals) with technical expertise in the field of taxation.
The authors: Dawn Contardi, owner of Sharp Bookkeeping Service, a Certified QuickBooks ProAdvisor and a member of the American Institute of Professional Bookkeepers with 25 years of experience. John Florentino Jr., EA, Enrolled Agent focuses on advising, representing, tax planning, tax compliance and tax return preparation for individuals, partnerships (LLC’s), corporations, estates, and trusts and any entities with tax reporting requirements. Both can be reached at 732-458-3800 or from our contact form.