Five Things to Make Tax Time Easier
Do you dread getting all of your things together for tax time? Do you forget some of the pertinent paperwork? Do you find yourself lamenting that you should have kept better track of things? Are there a few “guesses” on some of your previous tax filings?
Here are five simple ways to stay on track throughout the year and be prepared when “tax time” creeps up again!
Adjust your exemptions or payments based on last year’s tax return or bill. Every person’s goal should be to pay the correct amount of taxes throughout the year. A tax return is not a bonus. If you receive a return it is because you paid too much in throughout the year. Who wants to pay too much and then wait months before receiving it back? If this is the case with you, ask us to review your exemptions and what you are claiming and suggest adjustments. Also, we can advise you if your tax bill is estimated to be large and make suggestions to minimize your tax burden and possibly make payments throughout the year.
Create a file for all of your tax documents. A shoebox may not be the best method for keeping your tax documents straight, but it sure is better than no method. Obviously businesses should, and will most likely have, a physical and digital system for all tax documents. Individuals are more likely to go with the shoebox method or an accordion style folder. Regardless of how you do it, just do it, and don’t let your receipts fall by the wayside. Most of us spend a lot of time in our vehicles and go from one place to another when we make purchases so keeping an envelope or box in your trunk is a good way to stay on top of the paper trail too!
Keep a back-up of all your accounts. A simple jump-drive (memory stick) that is inserted into your computer’s USB port will do the trick in most cases. As the world becomes more digital even individuals keep PDF’s of bills and important documents needed at tax time on their computer. Sadly laptops and computers can be stolen, get complicated viruses, have a glass of milk spilled on them or have the “blue screen of death” appear. These are just a sampling of reasons that you should back up your information regularly. On a side note, backing up your computer to a jump drive (as long as it is large enough) can save you the heartache of losing videos or photos of friends and loved ones and the frustration of having to recreate time-consuming work documents. It’s always a win-win.
Set aside an hour on the 15th of each month. Or set aside any day each month, but the 15th lines up with your tax deadline, so it is a good trigger that may help you remember. Just take about an hour to go through your paperwork, filing system, shoe box or bank statements and keep them in order. If you take a few minutes to double check and you are good-to-go and completely organized – then great! No one regrets doing things ahead of time and catching an error on March 10 that happened on February 16 is much, MUCH easier than catching it in January of the next year. (What the heck did I purchase from Virginia for $209?!?)
Complete a quarterly “clean-up” of your files and information. The same reasoning applies as the once a month clean-up. If you are a small business or independent contractor making an income from many different sources it can be invaluable to have your accountant do a clean-up quarterly. Programs like QuickBooks and Peachtree make it easy for small business owners to do a lot of their own accounting that they never could have done in the day of ledgers and calculators, but you still need that second set of eyes.
Here at Numerico, we pride ourselves on preparing your taxes and answering all of your questions on time. We strive to exceed your expectations as we minimize your tax burden. Do you have questions or do you have an acquaintance that could use our expertise and would appreciate our good service? Please refer them to us…we appreciate you!
