As the January 15th tax deadline approaches, firms of all sizes are at the critical juncture of balancing the end of the previous tax year and the beginning of the new tax season. Jan 15th marks the due date for the final quarter of 2023 estimated tax payment. It signals firms to start their financial preparation for the next year. It is imperative to calculate taxes accurately and submit them on time to avoid hefty penalties and interest charges.
Navigating through the uncharted waters of taxation can be overwhelming for corporations and individuals. However, with AI-powered accounting intelligence platforms like Docyt, AI accountants can simplify this journey and prepare well for the January 15th tax deadline.
8 Tactics You Should Consider Before Filing Your Taxes
1. Keep your Financial Records Ready
“Early bird catches the worm.” It’s time to prepare your financial records, like income statements and expense receipts, to save valuable time and avoid making last-minute errors.
2. Ensure Employee Information is Updated
Updated and accurate employee data is crucial for payroll tax compliance. Accountants must verify, crosscheck, and update employee information, including W-4 forms. It is also important to record employee benefits & contributions such as health insurance and retirement plans accurately to ensure utmost compliance with the tax regulations.
3. Meet Payroll Tax Obligations
Accountants are accountable for withholding income taxes from their employee’s paychecks and taking care of Medicare and Social Security taxes. Before filing taxes, accountants must have accurate payroll records and often seek assistance to check that they’ve met all required obligations for payroll taxes, such as withholding taxes and ensuring the required forms are submitted to the IRS.
4. Review Tax Law Changes
Tax laws are subject to change. Thus, it is pivotal for accountants to stay informed of any changes and updates from the Internal Revenue Service (IRS). This will also enable accountants to analyze the impact of changes in tax codes on filing requirements, deductions, and their business.
5. Identify Deductible Expenses to Reduce Taxable Income
Accountants can provide a list of eligible deductible expenses that reduce their taxable income and overall tax payable. Some common deductible expenses include – home office deductions, business expenses, vehicle expenses, etc. However, to recover them, accountants must maintain accurate documentation. Accountants must also update depreciation schedules to calculate the depreciation of business assets. They must also consider the deductions stated in Section 179, which deducts the full purchase price of qualifying equipment and software, significantly reducing their taxable income.
6. Explore Tax Credits
Tax credits significantly reduce the income tax accountants pay to the government. Tax credits are offered by the government to certain types of businesses that benefit the economy, environment, nation, and citizens or have a purpose that the government deems important. Accountants should explore tax credits such as research and development (R&D), hiring employees from a targeted community or group, SECURE 2.0, health care, natural disaster tax relief, empowerment zones tax credit, plug-in electric vehicles, and employee retention credits. To determine which tax credits your business is eligible for, Click here.
7. Plan for Estimated Tax Payments
Accountants estimate tax payments based on current and forecasted revenues to ensure compliance with tax regulations. Accountants must plan to make estimated tax payments in advance to ensure they avoid paying hefty penalties. Furthermore, before filing, it is paramount for accountants to keep their tax forms like 1099s and W-2s ready and review them to ensure the information provided is accurate and complete.
8. Leverage AI-powered Accounting Software
Using AI-powered accounting platforms like Docyt AI can simplify the tax filing process for business owners and accountants. Our state-of-the-art platform automates calculations, digitizes paper receipts, and simplifies the tax filing stress burden by automating transaction coding, journal entries, and reconciliation seamlessly with QuickBooks Online. Furthermore, e-filing options can speed up the processing of returns and any potential refunds.
Why Choose Docyt AI for Tax Filing?
1. Automated Record Keeping
Docyt AI’s platform is equipped with a centralized and secured digital space to maintain and organize all required documents for tax filing in one place. Docyt AI handles your accounting in real-time and continuously reconciles your accounts to ensure financial information is always updated and accurate for tax filing.
2. Security & Real-time Compliance
Security is a top priority for Docyt AI. Our platform employs robust encryption measures and strictly complies with industry best practices to safeguard sensitive financial information. The Docyt AI platform is equipped with Expense Tracking features to support real-time reporting on expenses and flags missing transactions to fraudulent charges to ensure utmost compliance with security standards.
3. Facilitated Tax Planning
Docyt AI streamlines the tax filing process by making it simple, efficient, and user-friendly. Our intuitive interface guides users through each step to ensure they can access all required information for accurate filing. The Docyt AI dashboard aids users in exploring deductions and tax credits offered in Section 179.
Docyt AI reports and dashboards reflect real-time information on the organization’s financial performance. Thus, business owners don’t have to wait until 15 days after month-end to get these details. This distinctive feature empowers business owners to make faster business decisions and capitalize on market opportunities as soon as they arrive.
4. Easy Integration with Accounting Software
Docyt AI’s platform integrates with revenue and other tech partners to seamlessly fetch data. It can easily synchronize with QuickBooks online to ensure seamless updates to the general ledger.
5. Vendor Tax Compliance
Docyt AI provides a comprehensive solution for vendor tax compliance by automating the collection of W9 information to improve the accuracy of tax reporting and reduce error risks. Our platform streamlines the time-consuming 1099 reporting process through automation, reducing the likelihood of errors associated with manual data entry. Docyt AI further encourages timely and accurate 1099 filings for businesses by allowing them to easily export 1099 information at year-end to avoid penalties and the stress associated with last-minute scrambling.
Fallen behind on your business taxes and bookkeeping? Docyt AI offers catch-up booking services for all industry types. No matter how far back your books have fallen behind, our team of professionals can work with you on a game plan to get your books back on track. Learn more here or contact us today.
