Organizing Taxes for People Who’d Rather Chop Off Their Heads Than Organize Tax Stuff
If I had my druthers, I’d throw a thousand little paper bits into a shoe box and dump them on my accountant’s desk every April 14th. But I have a business to run and a reputation to uphold so that’s not an option.
Knowing myself as I do, I have to keep this whole taxes thing SIMPLE! So, if you’re like me and would rather chop off your head than deal with mathy-numbery-taxy-stuff, here are the tips that keep me from entirely losing my mind.
Here’s my short Tucson Morning Blend segment on the topic for your viewing pleasure, or keep reading for the highlights…
Disclaimer: I am not an accountant or tax preparer, so always talk to your professional tax person to be sure you are doing everything that’s right and necessary for you.
If you remember nothing else, remember these 5 things
- Keep all tax-related papers in one place
- Put it on your calendar to manage your money on a regular basis; pay bills, file/enter tax-related expenses.
- Commit to the system that works for you and stick to it (see #2).
- Do a little at a time all year (see #2).
- Dump the oldest year when you file your newest.
Whether we embrace or avoid a close look at our finances, doing taxes shines a light on our attitude about money, income and spending habits. We may resist, but it can help us reign in spending and save for big, happy goals.
Wondering about donations? You may want to check out my blog post Tax Time Tips for Donating Your Stuff.
If you’re committed to PAPER: Even if you use technology (see below), you will still have to process all the paper that life throws at you, so start here.
- CONTROL STARTS IMMEDIATELY: At checkout put every receipt in your wallet, not in the bag.
- Sort out personal receipts from business receipts. If you dont now, here’s why.
- Write the category on receipts right away.
- File all paper bits in a SIMPLE, EASY system by category – personal & business separately. I use this expanding accordion file from The Container Store.
- Keep a little notebook book in the car for keeping track of business- and medical-related mileage.
- Ask your preparer for a list of relevant records you need to keep and make categories accordingly, especially as the tax laws change this year. My friends at Liberty Tax Service (several locations) will happily give you personal or business TAX WORKSHEETS or look online.
- Do a little each month and it’s all ready and tidy when you do your taxes OR hand your tidy stack of information to your tax preparer.
If you’re hip to the advantages of TECHNOLOGY: Given my shortcomings and short attention span for numbers, I use technology to my advantage.
- I use book keeping program Freshbooks (totally worth the monthly fee in all the dinero it saves me). three of the top programs for personal accounting are Freshbooks, Zoho and Quickbooks.
- Now I’ve linked bank account to Freshbooks, so once a week I just categorize each expense. (Yes, it’s on my calendar.)
- Any Paper receipts handle as above.
- SCAN receipts or FILE them, as your tax preparer recommends.
- I use MileIQ to keep track of my driving deductions and merge with Freshbooks.
- Then I click the Profit & Loss button and voila – I have a tidy little stack of papers to take to my tax person because – OF COURSE I do NOT do my own taxes. That would just be insanity!
My tax preparer magically turns all that information into a tidy folder and I’m ALL DONE! Then I just file that folder with this year’s receipts in a manila envelope.
Each year, shred the oldest one when you put your new one away. It’s generally recommended you keep personal returns for 3-7 years depending on your tax situation – ask your professional. But, seriously, you don’t need your 2001 tax returns!
Happy Tax Season! Love, Jennifer
For more info to help you find YOUR best system, here are a couple links for you:
https://bethkobliner.com/advice_basics/6-steps-organize-tax-documents/
https://housewifehowtos.com/get-organized/organize-your-documents-for-tax-filing/
