Make Tax Time Easier
There are certain things in life that we just don't like to think about, aren't there? We try to suppress thoughts about things that we find unpleasant, but questions about these issues tend to haunt us by popping up into our minds anyway. They range from "When am I finally going to clean out the closet that probably contains everything I've lost for the past five years?" to "Isn't it time to get my financial stuff together now so I don't lose hair and develop a stomach ulcer and nervous twitch like I did last tax season?" Oh! The horror! The memories!
To some people - like those who have one job, no business, no dependents, no write-offs, no assets, no liabilities, no buying or selling or interest-bearing anything - tax time is a breeze.The 1040EZ rocks! On the other hand, life's a little more complicated for many others, so here are four tips that might help you this year:
1.) Start sorting and organizing your paperwork and receipts now. Yes, it's November, and people are thinking about seeing their family and eating turkey and pumpkin pie, but guess what? You know that you can block out an hour or two this week to see what you have to work with. Here's your incentive: you'll save money when you don't have to pay your CPA or tax preparer to extract actually figures and numbers from the shoe box or overstuffed manila envelope that you usually hand to him or her. They have to charge you an extra fee to make sense of it all, but you can save that money by gathering the appropriate statements or documents that you've received so far this year, and just adding November and December's statements to the files that you've already created.
2.) Budget for a payment that might be owed. One of the main reasons why people get behind in their personal income tax and business taxes is because they are not prepared to pay the amount that is due. Perhaps any interest and penalties that come with a delayed payment could be avoided with a little shrewd planning to put some money aside for the tax bill over the next few months.
3.) Start using your tax software now. If you organize your receipts according to the same categories used in your software, the totals will add up automatically at year end and you'll avoid confusion as to which line item to fill out on your tax forms. Writing the business purpose on the receipt itself will help document the expense for good record-keeping to help in case of an audit.
4.) Decide now what tax-deductible donations you will make. Take the time to find out exactly how, where, and when to donate items to a qualifying non-profit agency as well as details on obtaining a receipt. Organized, planned and thoughtful giving has a list of benefits that goes on and on.
You know the famous quote about how success happens when opportunity and preparation meet, right? Well, when the opportunity to file your taxes meets the preparation that you're starting now, we hope that you'll enjoy some success.