When tax time arrives, it can be immensely stressful for small business owners and their financial accounting teams, particularly if mistakes have been made throughout the year, or if not enough thinking and planning has gone into what needs to be done for the federal tax return.
Leaving things until the last minute is the absolute worst possible plan, because when tax time comes around, your business should be prepared. The last thing you need is a last-minute panic and the chance of an unpleasant surprise in the form of a sky-high federal income tax bill or penalty charges because you’ve made mistakes with your tax preparation.
On the other hand, you don’t want to overpay because you’re not fully aware of all the tax deductions your business should be taking advantage of on your tax return, which include client entertaining, vehicle expenses, and employee travel expenses. For a complete breakdown of what you can and cannot use as deductions, it’s always best to check with the IRS.
How Bento Makes Expense Management Tax-Friendly
One of the valuable benefits of the Bento Business Prepaid Debit card is that it automatically monitors, records and categorizes expenses, making tax time much easier. Bento keeps you on top of your expenses all year, lets you tag deductible expenses, and even lets you use a different card if you only want to use it for a specific type of expense, say gas, or travel & entertainment. Using Bento will make tax time straightforward and trouble-free.
The number-one rule of expense management for your federal tax return is to keep track of all of your business expenses throughout the year by recording them as you go. You’d be surprised at how many financial accounting teams leave bookkeeping until it’s almost tax preparation time, which results in many headaches and panic attacks. While getting your expenses together might seem like a fairly simple task if you don’t have that many expenses, it’s still going to take up valuable time. And if a discrepancy or irregularity is uncovered, you’re faced with trying to work out what happened using only historic data, while trying desperately not to miss the deadline for your business tax return.
Commingling of personal and business expenses is another area where small businesses get in to trouble. With Bento, you can tag those occasional personal expenses as such. This makes it easy enough to remove them from your reconciliation come tax time.
If you have ever been a slave to a shoebox of paper receipts, then maybe it is time to consider a solution like Bento.
With the Bento Dashboard, you can see card transactions by person, card or category, and break down business expenses in as much or as little detail as you need. Need to export all expenses by an individual? Not a problem. Want to see how much your business spent with your Bento Petty Cash card in Q2? Piece of cake. With just a few clicks you can have the data in any format you need and import it into QuickBooks or any other accounting program. The responsive filter means that when tax time comes around, you and your team won’t have to spend hours on end searching through receipts and records—you’ll have each and every expense transaction available at the touch of a button.
Another way of simplifying the reconciliation of your business expenses is to dedicate different Bento Business Prepaid Debit cards for different functions. Using separate cards for different types of expenses means that you can easily download just the data from each card from your Bento Dashboard, with no need for tags. Of course, it all depends on what works best for your personal business model as Bento was built to adapt to your business. However you choose to personalize the Bento solution, one thing’s for sure—you won’t be facing any nasty expense surprises at tax time!