We are hiring! We are always looking for amazing people to join the growing bookskeep team Apply here

Blog

Tax Season Has Come Early This Year

Although it may seem like the end of the year is too busy to fit another thing on your list, it’s actually the best time to tackle the challenges of tax season. For ecommerce business owners, tax season can be particularly stressful. However, starting early and breaking your list down into our 5 simple steps can help ease your tax time anxiety without overwhelming you during the holidays.

Finish Strong

Adding more to your end of year list sounds like a nightmare, but using the steps below over the next few weeks can actually lead to the tax season of your dreams!

Step 1: Inventory Documentation:

      • Retrieve your Amazon report and generate an IL (Inventory and Location) inventory report.
      • Take note of any prepayments or items in transit and record their values.
      • Conduct a physical inventory count in your warehouse or garage.

Step 2: Complete Outstanding Coding and Reconciliations:

      • Put the finishing touches on any coding or reconciliations that need to be finalized in January.

Step 3: Review Financial Statements:

      • Run your Profit and Loss (P&L) and Balance Sheet from your accounting system. Verify that they make sense.
      • Examine your inventory values; do they align with your count reports? Compare them to the previous year. Are there any discrepancies that need addressing?
      • Ensure that your financial statements accurately reflect the reality of your business year.

Step 4: File 1099s by January 31, 2022:

      • Collaborate with your bookkeeper or CPA to file your 1099 forms.
      • Consider using online filing services like Track1099 (https://www.track1099.com/) for added convenience.

Step 5: Provide Information to Your Accountant:

      • Share all the necessary financial information with your accountant and let them work their magic.

By following this step-by-step approach, tackling one task at a time over the course of several weeks, you’ll not only feel well-prepared and organized but also make your CPA’s job easier. Simplifying your ecommerce tax season not only makes tax season easier, but year-end as well!

 

Post Author Cyndi Thomason

Cyndi Thomason

Cyndi Thomason is founder and president of bookskeep, a U.S.-based accounting, bookkeeping, and advisory firm for ecommerce sellers worldwide. She has a passion for data analysis and process development. She uses that passion to educate her clients and help them structure their businesses to maximize profits.

Leave a Comment

Your email address will not be published.