TAXES, TAXES, TAXES
Tax time is a routine part of life every year for business owners and company employees alike. The deadline for filing annual tax returns is by April 15th (gulp). Once that day has passed, we all must begin to prepare for the next one. There’s federal and state income tax, personal property tax, payroll tax, city business license tax, sales and use tax, capitol gains tax, and estate tax. Calendars must be highlighted with reminders of Due Dates and prior dates to prepare info.
Except for possibly accountants, no one looks forward to these due dates. For some people, just the thought of tax day approaching triggers panic. Here are a few causes of this mind-numbing anxiety:
1. Overwhelmed and don’t know where to start organizing deductible expenses and income records.
2. Routine bookkeeping does not happen during the year.
3. Receipts and documents are in piles instead of files, often in more than one location.
4. Waited until the last weekend or last month to gather supporting information.
5. Depressed or in denial about the reality that record-keeping reveals.
Now, we hope to help you avoid the chaos and agony.
CURE THE PAIN
Here are 10 Hot Tips To Cure The Pain while preparing for tax time and find peace of mind.
1. In January, create separate folders for the new year’s income, expenses, investments and bank statements.
2. Set-up a General Tax folder to hold 1099s or W-2s and other pertinent records.
3. Create appropriate categories for your accounting software or spreadsheets.
4. Every day, drop your receipts into a folder labeled “To Input” for bookkeeping records.
5. Every week, schedule a regular time to pay bills, post deposits and receipts, plus do your filing.
6. Every month, reconcile bank statements and credit card statements to avoid any errors.
7. At the end of the year, a P&L (profit & loss statement) can be provided to your tax preparer.
8. Start a special savings account and make weekly deposits in order to pay your taxes on time.
9. Hire an experienced, professional bookkeeping service if you can’t keep up.
10. An established CPA who knows your affairs can provide advice during the year.
Wasting valuable time or adding stress is not something anyone needs. No one can afford it either, so be good to yourself. Remember … “Organizing is a ‘process’ … it’s not a one-day project.”
SOLVING THE PUZZLE
Ask your accountant how many years you must keep your supporting documents. Store your records in a waterproof box labeled (2005 Taxes – Destroy _______ ). On the expiration date, be sure to put everything through a shredder. [ See Article ] Especially shred cancelled checks, bank statements showing copies of checks, and receipts or statements with your account numbers. Protect your identity. Store separately all your annual tax returns, confirmation slips for investments, home improvement records and receipts for major purchases, which must be kept indefinitely.
As Nike says, “Just Do It.” Procrastination is a leading cause of disorganization. Make it a practice to be more aware of your actions. If they include old unproductive habits, stop and allow yourself to practice new, more efficient habits. This will make a huge difference in every phase of your life.
Fast forward to January next year, you are organized with systems and procedures in place. Tax time will be less stressful from now on, right?
If this process seems too difficult for you to complete alone, call a professional for assistance. The reality is the longer you wait to start, the worse the situation could become.
No part of these articles may be reproduced in any way without written permission by author.
REPRINT PERMISSION granted when the following credit appears in full:
Reprinted with permission from Donna D. McMillan
Professional Organizer and Productivity Consultant
McMillan & Company Professional Organizing