It’s tax-time, and you find yourself running around, frantically sorting through piles of paperwork and receipts and donation slips, reviewing that dreaded excel spreadsheet that somehow didn’t balance – again. You wonder why every year it’s the same situation – panic, rush, stress. Will it ever get easier? Is there just no cure to this tax-season fever?
If that sounds like you at tax time, you need to read this article.
With just a bit of time and preparation, the seamlessly endless headache that you experience as the tax deadline looms can be totally avoided.
Check out our list of easy to follow steps to minimize stress for next year’s tax season, your future self will thank you!
Implement A System
Now this doesn’t have to be a high-tech, automated system. But you do need a process for managing your finances. There are tons of free accounting software that you can use to record every little expense and profit, undoubtedly making next tax season hassle-free. Don’t put this one off – by learning and using a finance management system you will not only save stress next year, you’ll also save stress throughout the entire year by knowing exactly where your finances stand throughout the entire year. And make sure you actually use the system! Having one in place is useless if you wait until the end of the year to input all the data.
Organize Necessary Paperwork
Even in our digital world, it is highly likely that you will accumulate paper receipts, invoices, pay stubs and donation slips. We recommend investing in a simple accordion folder (a step-up from the age-old shoe box) so you can keep these organized.
Make sure you keep:
· Donation slips
· Medical expense receipts
· Pay stubs
· Investment summaries
· Property tax bills
Prepare For Big Life Changes
If you know that your life is about to go through a big change, such as getting married or having a baby or buying or refinancing a house, you’ll want to make sure you consider the impact of these changes on next year’s tax return. Having a baby means that you’ll qualify for a tax break depending on your tax bracket, but you’ll want to make sure that you carefully record any expense related to the newest addition to your family. If you’ve sold a house and made a profit, keep in mind that you will likely have to pay taxes on this extra income.
Sit Down With Your CPA
If you have any questions regarding your financial situation, including what expenses you can write off or what you need to do to minimize your tax payments after selling a home, sit down with your accountant.
If your accountant is the type that tends to go MIA when tax season is over, you might want to consider switching accountants. You should be able to contact him/her any time of the year for advice and tax information.
Unfortunately many accountants don’t have the time for small businesses, meaning they only come around when it’s time for them to collect payment for filing your taxes. If this sounds like your accountant, give Small Business Tax Accountants a call today!