Getting Ready for Tax Season

Tax  season is just around the corner~


Rather than dreading tax season, wouldn't it be amazing if you just got it done.
Being an organizer I am one step ahead of the game each year. When tax season roles around, it's just easy. Why? I plan through out the year. It is a daily practice. It's also never been easier.


With downloading expenses from the bank into programs like Quicken or QuickBooks all you really need to spend some time setting it up initially and then committing to when you will download the information. I do it weekly and sometimes bi-weekly depending on how much activity has gone on in my accounts. I manage 5 accounts for me and 4 for a clients including 7 credit cards. Sounds daunting? Not really - it takes less than 1 hour a month to update everything and at the end of the year, all my expenses are calculated. My tax calculations are ready by Jan 5th, every year. Not trying to show off, just want you to see that if you do it through out the year, the stress is minimal.

The real work comes in setting it up. Knowing what you need each year and making sure your categories reflect that. If you are not good at setting this up, get someone to help. Plan on 2-5 hours depending on how many accounts you need to do. Just paying bills online is not enough for taxes. Downloading into programs that categorize expenses is the next step. There are some cyberspace programs like Mozy.com and some new Apps ( I am not totally up on all this ) for those who really want to make it simple. Either way, I encourage you to set up your systems now for this year so you will be ready for next year.


As for this year, if you have not set up your system to give you expense reports for taxes then the best way for you to get ready for tax season is the following:


a) Make a list of what categories you need for tax purposes.
b) Sort through all last year documents and make piles by category 
c) Toss any paper work that is not tax related or informational that you need for referencing.
c) Receipts - if you are an independent contractor - meals, entertainment, travel. parking/car, medical expenses, etc.


If you are not sure what you need - get a copy of last years return and follow the same guidelines or ask your accountant.


Start early - take baby steps. Think of it this way, if you set aside 4- 6 - one hour time slots or 8-12, 30 minute time slots between now and March 15th, you most likely will be done collecting all you need. 


Remember if you just say when you will do it...it will get done :)


~Eve