If you run a startup and haven't yet filed your taxes for 2016, it's not too late to benefit from a few tax season pointers which save you time, headaches and money. That's according to Kenji Kuramoto, founder and CEO of accounting service Acuity.co. Here are six ways you can more efficiently prepare your 2016 tax return.can
1. You don't need to issue a 1099 to contractors who you paid less than $600.
Save yourself the cost of filing these smaller amounts electronically, not to mention the time and effort of completing the form. "All expenses paid out to contractors lower your taxable income, regardless of what amount you paid them. However, if you're paid them less than $600 you don't need to go through the cost and effort of filing Form 1099s," Kuramoto says. "We see small businesses often sending out 1099s for all contractors, even ones below the $600 threshold, which is extra work they shouldn't have to go through."
2. You don't need to issue a 1099 to anyone you paid via PayPal or a credit card.
"Issuing 1099s when you don't have to is wasteful of a startup's resources," he says.
3. You don't need to save a paper receipt for every little thing.
Maybe a box full of receipts was necessary when more expenses were paid with cash, but today bank and credit card statements will suffice as evidence for IRS purposes. You can use these documents--which are widely available online--to support the timing and amount of a payment.
4. You don't need to track deferred, accrued and pre-paid revenues.
If you're under $10 million in gross receipts a year, you're likely taking advantage of cash-basis tax filings, and this kind of tracking isn't going to help you from a tax standpoint. Aside from taxes, however, you may want to go through the effort to appease investors, or if it helps you run the business.
5. You don't need to provide daily or monthly charting of accounts.
Typically only a dozen or so boxes need to completed for a corporate tax return. Over-reporting results in expended effort which doesn't pay off in the form of a lowered tax burden. Check with your CPA regarding what detailed information actually is necessary.
6. You don't need to be sending your CPA emails and paper documents.
The cloud makes it easy--through countless software applications--to give your tax preparer instant online access to all your electronic data which he or she can easily plug into your return. If you're emailing back and forth, or handing over paper documents, you're working too hard and wasting precious time.