A new year is a time to focus on the future, leave the past behind and move our businesses forward. However, there can be one area of activity that doesn’t want to let us move forward: closing previous year financial statements and filing taxes. This activity can be a burden and create stress. Why would some organizations hold out on this for 6 or 9 months or more?
During the 2019 tax season, nearly 34 million taxpayers waited until the week before or the week of April 15 to file their tax returns. Why procrastinate, especially when more than 70% of personal filers received a refund?1
This month, we would like to share with you additional benefits to closing previous year financials and filing taxes EARLY.
- Eliminate tax deadline stress. Any time you face an unpleasant task, it’s best to get it out of the way as soon as possible. Taxes are no different. You have to fill out the forms, and you have to file them, so grit your teeth and get it done.
- Protect refunds from identity thieves. According to the Government Accountability Office (GAO), the IRS estimated that online tax fraudsters stole $1.6 billion through identity theft tax refund fraud in 2016. 2 Filing early helps to ensure your true SSN or FEIN has been registered with IRS before an identity thief has a chance to file it for you.
- Make a plan if you have a tax bill. If you are surprised by a tax bill, it’s better if you know about it early.
- Secure timely access to your tax professional. You may have found out the hard way that it’s tough to get on a good tax pro’s schedule during peak season. Avoid an extension or paying a higher fee from your tax professional. Get an appointment with your advisor as soon as possible.
- Get your financials in the hands of buyers. If you are planning to or are in the process of selling your business, you want to avoid losing time or even a potential buyer by delaying the release of your year-end financials.
- Move on with your planning. It is difficult and less effective to forecast, budget and plan for the upcoming year if you are working with year-old outdated financials.
Our challenge to you this month: make a plan NOW to close your financials and file taxes early. Perhaps target 2-4 weeks earlier than last year. Make appointments with your professional advisors this week. It has to be done, so move quickly to put the burden and stress behind you and eliminate the risks we outlined above. This will create more space to focus on the priorities of growing your business.