How would you rate yourself on preparation for this past Tax Day?
If the mere words "Tax" and "Day" make you break out in a cold sweat, you won't be giving yourself a good score.
But if Tax Day is just another day for you, a well-prepared businessperson, then you undoubtedly did a stellar job in getting things in order.
April 15 is a good annual reminder of just how well you are doing in the planning department — not only in terms of time, but of money.
Like public speaking, Tax Day is undoubtedly one of Americans' top fears. But it needn't be. With proper preparation, it should be like any other day — a day on which it is possible to experience great joy.
Let Tax Day serve as a microcosm of your fiscal responsibilities as an attorney. In involves an investment of time, regardless of whether you do your taxes yourself or have a tax preparer do them for you. Tax Day requires keeping close track of expenses so that you have a record of deductions and depreciable items. It also requires keeping detailed records of income. Many taxpayers pull the equivalent of a test-cramming all-nighter and catch up on a year's worth of record-keeping in April. Things get missed that way. On the other hand, if you plan well, keeping your records updated on a daily, weekly or monthly basis, all will be in place come tax time. Then it will just be a matter of inputting numbers into the proper boxes on the forms.
If you owe taxes, you need to plan further for that expense, just as you would plan for any other business expense. When you create your cash flow form, you must account for your taxes owed. If you don't do that — especially if you have a particularly good business year — all of your careful planning might come tumbling down like a house of cards. Furthermore, if you don't keep your records on a timely basis, it is difficult to know where you stand financially for business purposes.
This year was an unusual for tax filers because they got an extension from the usual April 15 to April 18 due to Emancipation Day. For those of you whose only planning involves planning to procrastinate, the extra three days may have served as a wake-up call. Hopefully, you realized just how much work needs to be done at tax time, and that in the future you won't have the boon of an extra weekend to do it in.
Don't plan to procrastinate. Plan to be prepared and not only avoid the stress, but also reap the business benefits of proper preparation.
