Step 1: Review your financial information,

• Make sure the information about your employees and contractors is up-to-date and true. Verify data such as employee names, addresses, social security numbers, marital status, etc. If you work with independent contractors, check their names, taxpayer identification number (TIN), and addresses.

Step 2: Organize your documents,

• Keep your documents and records organized to make the preparation process more efficient.
• Keeping a record with all the business documentation allows you to keep your financial statements up to date, control your expenses, and is useful in the event of an audit or lawsuit.
• In addition, the Internal Revenue Service requires that you submit documents to support the income, deductions, and credits that you report on your tax return.
• These are the main records you should keep:
• receipts, Deposits (cash and credit sales), Invoices, Canceled checks or other proof of payments or funds transferred, credit card receipts, Bank statements, Accounts payable and receivable, payroll records, Previous tax returns
• Any other document that serves as support of income, deductions or credits that appear in the tax return
• Other documents you may need during tax season are:
  • Contracts you have signed with customers, suppliers, employees and contractors
  • Statutes of formation of a commercial company
  • permissions
  • Health and safety policies and any similar documents
  • annual reports

Step 3: Consider extensions, deductions, and refunds
According to the IRS, there are business administration costs that are deductible, as long as they are “ordinary and necessary.” This agency defines ordinary expenses as those that are common and accepted within the scope of the business. Necessary expenses, on the other hand, are those that are appropriate and useful to the business. Some examples include the purchase of equipment or vehicles.

These are some of the expenses that you can deduct on your taxes:

Purchase of equipment. According to the IRS, business owners can deduct from their income a limited amount for the cost of equipment or machinery they purchased in the past year.
Business expenses. Deductible business expenses include: advertising, employee benefit programs, telephone and utility costs, office supplies, employee salaries, professional association membership dues, trade publication subscriptions, and rent .
Travel expenses. You can deduct the ordinary and necessary expenses that are generated during business trips, such as transportation, meals and lodging. Your records should record how much you spent on each of these activities; as well as the departure date of each trip, the number of days it lasted, the name of the city, and the reason for the trip or the benefits you expect for your business from it.
Vehicle expenses. If you use your car for business-related activities, the IRS allows you to deduct your expenses, or claim the standard mileage rate, which is an amount of money you can deduct for each mile driven while on business trips or company tasks. . For tax purposes, be sure to keep track of these miles, as well as parking and toll costs, as they can also be deducted.

Step 3: Consider extensions, deductions, and refunds
Gathering all the required documentation and making sure you follow the steps properly can be overwhelming. Do not hesitate to seek the help of a lawyer or an accountant to advise you. External consulting may be the quickest and easiest option to avoid audits and save money .