I know, I know, I said it. And it’s only January. What the heck am I thinking? I mean, there’s almost 3 entire months until we have to file our taxes – why on earth would I bring up such a thing?
Because I hate them, that’s why. And the better-prepped I am NOW, the less stressed out I’ll be LATER. (This is my philosophy on most things, in case you didn’t notice before!)
So, in the spirit of being prepared, or ahead of the game, even, here are 10 things I do during the year to prep for tax time!
1. Save receipts
We itemize. So all year long, I’m saving receipts. Some I can’t do anything with, but most of them are saved! And yes, sometimes it’s a pain, but in the end I’m always glad that I’ve done it!
2. Sort receipts
Once I have a receipt, I have to place it in the proper category for itemization. I have a collection of jars for that purpose, as well as a collection of highlighters. Yep, this is a pain too, but still better to do it as they come than have to do all of them at once!
3. Maintain good files
As invoices and bills come in throughout the year, make sure you have a good filing system set in place. That way, at the last minute, you’re not searching for your cell phone records to deduct those costs from your small business. You already know right where they are.
4. Track mileage
I’ve done this in multiple ways. This past year, I tracked my deductible mileage by snapping “leaving” and “arriving” photos of my odometer with my cell phone, and transferred them into my business records at a later time. I’ve also kept a pocket planner in the car, and on the date I traveled, I marked it in the planner. I’ve employed a voice recorder system, as well.
5. Scan unnecessary papers into digital form
I HATE towards the end of the year when my filing cabinet starts to get a bit full and it’s harder to place additional paperwork where it belongs. So, I scan papers onto a jump drive. It’s organized into files and folders and cross-referenced and color-coded – that way, I can type one simple word into the search bar and it pulls up the exact document I’m looking for. Works like a dream and you get rid of all that nasty paper!
6. Back up files
Make sure that all your important documents are backed up – whether they’re on a CD as well as a jump drive, or you store them in a cloud or on a dedicated or backup server. BACK EVERYTHING UP. I cannot stress this enough!
7. Communicate with other household inhabitants
This may sound odd, but here’s an example: did you know that if you hold a student loan for one of your children in your own name, YOU can write that off on your taxes? That’s a good conversation to have!
8. Know an expert in the field
All of our tax information gets turned over to my cousin, who used to work for H&R Block and knows lots of experts in the tax arena. When she gets our information, she does everything she can, and then has someone even more experienced look it over. If I ever have any tax questions, I know just who to call.
9. Have everything else completed when the W2’s arrive
Your employer has until the end of January before they have to give you your W2, and it’s much easier if all of your other tax items are already together! Then you’re good to go, as soon as you get that W2!
10. File BEFORE the deadline
I mean, whether you’re getting a refund (which I hope you are!) or having to pay in (which we did last year, and that was NOT fun) would’t you rather go ahead and get it over with? Instead of waiting until the last minute, stressing yourself out and wondering what was going to happen?
I hope these help! What is YOUR best tax tip?
I love your list!! You thought of everything. I am very lucky to be married to the tax man, so he does all of this for me 🙂
Oh my goodness, Robin!!! That would be wonderful LOL
Great advice and one I will definitely be using over the next year! I’m bookmarking this article! Thank you!
Thank you, Sherry! 🙂
For the first year ever I am actually pretty well prepared-it was something I promised myself last year when I was going crazy entering into Quicken–I am a bookkeeper so I do know what I am supposed to do-I also do my own taxes-Your list is great and maybe I will print it out and scotch tape it to my wall right in front of my computer-my filing stills leaves a bit to be desired!!
Oh, thank you for the kudos on the list! Coming from a bookkeeper, that makes me happy!!!
Great list. My taxes are a nightmare this year because it’s my first year as a business owner. Inventory and business expenses and advertising fees, OH MY! I’m terrified. Luckily my dad is going to hold my hand through through the process. The good news, if I can get through this tax return, it will be a whole lot easier next time!
Oh yes, I remember taxes that first year I had my photography business. No worries, it’s a little overwhelming at first, but you get used to it!
Hi Kristen! I need to do a better job on the mileage part. It’s something that I just don’t think about during the year, and I need to look at exactly what mileage trips that can be counted. I can certainly start this year. All the other tips you provided are great as well. Thanks!
I know, it took me a while to get in the habit of tracking the mileage, for sure. Good luck!
Thanks for sharing. I never think about this soon enough… 🙂
Glad you found it helpful, Marya!
I let me husband do ALL the tax info! I am horrible and stuff like this! So I dont have any tips 😦
Hey, that in itself is a tip! I don’t know what would happen if I let my husband take care of it…
I’m covering my ears and singing “lalalala” all the way back to my own blog. This is great information, but I can’t begin to think about taxes yet! I’ll be back in a few months to see what I *should* have done!
HA! I know, I knew some would have that reaction LOL
These are all great tips. I dread doing taxes every year, even though we usually get a refund. It’s just such a tedious task! I agree, being organized is a huge stress-buster and time saver.
Yes, tedious indeed! I try to tell myself that the sooner I get it done, the sooner I don’t have to worry about it!
My best tax tip is – let your spouse do it for you! I know, I am spoiled and very thankful for it.
That IS a good tax tip!!!
What a great prep list. It seems everywhere is the same in a matter of tax. Pin it.
Thanks, Adelien! 🙂
Don’t do them…go to jail…and then you don’t have to worry about them until you get out again! Wait, no…that’s not it. I am also a get-it-done-early girl. I would rather pay more in and get a refund, than worry about how much I am going to owe. The refund is kind of a little savings account for me. I too have already been thinking about taxes and wondering if Rory needs to file her own now that she has started collecting SSI. I HATE worrying about taxes. Thanks for these great tips! 🙂
~Lorelai
Life With Lorelai
I HAVE thought about not doing them before LOL (Just kidding, IRS, if you’re monitoring this site…) 🙂
I would love to think about not doing them… but I’m too big a chicken! bock, bock, bock…
LOL
This is great info. Knowing an expert in the field is key – for me at least!
Me too!
as a blogger do you have to claim what you make blogging if it’s in form of items or is that just free money never really understood that part
Well, I haven’t made anything yet, so I’m not sure yet LOL
I am right there with you I have all of my receipts sorted. The bank statements have been examined and charges that are tax-related are now entered to a spreadsheet. When I pay the bills, I already know which items are related to taxes so they are filed at that point. Right now, I am just waiting for 1099s and other annual statements. I will efile on 1/31/14. Get ‘er done!
You go girl!!!
I am not looking forward to taxes. I always get so nervous about it! Luckily I don’t have to deal with receipts or anything like that but it still drives me nuts!
I know! That’s why I like to get it over with!
Great tips
Thank you! 🙂
Thanks for sharing your tips. We don’t itemize, but if we ever do your advice will come in handy. Sometimes it is better to get someone experienced to handle such important matters to make sure it’s done right. Hope you’re having a great day. God bless! 🙂
You’ve got that right, Angel!
These are very good tips for any taxpayer. It is about to be tax time, too.
Boy buddy, don’t I know it 😦
Luckily, my husband takes are of our taxes so I never have to worry about tax season. He actually filed them himself last year. The year before that the tax company messed up on his taxes and because of this he was almost out 3,000 dollars!
Oh my goodness!!! That’s awful! I hope he got that money back!
I might be weird, but I really like doing my taxes. My husband is a CPA and I do the bulk of our taxes still. I think it is the challenge of seeing how much we can get back even though we try to pay as little as possible through the year by filing a big deduction on our w-4. Being organized is key. I try, but it is always a challenge. Thanks for the great tips!
Amber, I’m glad SOMEONE likes taxes LOL Good luck to you on getting back as much as possible this year!
Thank you for the tips! To Amber @ Tales of Domestica, you’re not weird, I like doing mine too! I get money back, lol. Anything that gives me money is a good thing! Of course, if I ever get to the point where I owe, I may change my mind.
LOL Yeah, we ended up owing last year because we moved up a tax bracket and didn’t know it. I was SHOCKED. I had NEVER had to pay before!
I am so thankful my husband does all our taxes! It is such a stressful process, but I think this list is great! It definitely covers all the bases!
That’s fantastic, Theresa!
We used H&R to do our tax but even though we still required to do our responsibilities to get the right refund. Thanks for the tips, those are very helpful.
I’m glad you liked them!
Please do not take this the wrong way but – nooooooooo, not the T word already. I am not ready and we are going to be relocating and I am not going to be ready for a while.
HA! No worries at all…I’m sure there are many more like you 🙂
My best tip is just let my husband do them. I always miscalculate!
That’s a great tip indeed!
Great tips! I never really thought about keeping track of the mileage I’ve used. I usually get mine done at H&R.
And they never ask you about mileage? Oooo! 🙂
Good list Kristen! We have had to keep up with tax info for a long time since we have owned a business for so many years. It is always my least favorite time of the year, always wait until the deadline to file. LoL
Yeah, it’s not my favorite, either, but I just like to get it done as soon as possible!
Great tips. This is something I can fall back on when it’s time for me to file my own taxes one day. (Sadly, I’m still pretty young and unemployed).
Enjoy it while you can, Kristal!!! 🙂
I am very fortunate my father can do my taxes for me. Taxes are just so confusing to me.
Oh, that’s very good! Yes, they confuse me, too 😦 That’s why all I do is keep track of expenses. My cousin does the actual “doing”!
I’m really not looking forward of doing my taxes this year. No matter how “prepped” i get mentally lol I guess I will have to get to looking for those receipts some time soon *Le Sigh*
*Le Sigh* I like that LOL If you throw them all in the same place from the beginning, then you won’t have to search! 🙂
I hate taxes. Period. It is my least favorite time of the year. lol .Thanks for the tips.
I don’t like them, either 😦 That’s why I try to get them over with ASAP
In Finland we do the taxes before the Christmas. That way you know if you have money left for the presents or not, lol
OH! LOL That’s a better idea, for sure!
Great list! and I can’t say enough to back everything up. Twice…three times!! make copies!
Absolutely! I’m always so scared of what will happen if I lose anything LOL
I have a love hate relationship with tax time. I love getting a refund, but hate sorting through papers and stuff to get ready for my CPA
Yeah, I’m with ya!
Sounds like you are very much organized i hate the piles and piles of receipts we collect and then most places you also have to ask for the VAT receipt else it will be no use to you and they do not always just give you the correct one its a pain in the u know what lol.
Yes indeed! I agree!
Great tips! I am starting to gather up my stuff as well, thanks for the reminder.
Sure thing!
I keep records all year too, and back EVERYTHING up. You’ve given some great tips!
Thanks, Rosey!
I don’t save every receipt just medical ones and cell bills…those go in to a large envelope. I don’t stress about it, I like doing them. I guess that’s when those accounting college classes kick back in, I like entering numbers! I haven’t owned a business for a few years and that does make the process so much easier! Sounds like you have it all under control…as usual. 😉
Brandi, if you ever want a job doing taxes, I think I’ve just built you an entire client base right here LOL
I like to brag and say my husband does our taxes. I hope he is getting the stuff right, and I’m so glad I don’t have to deal with it!
I’m sure he’s doing a great job!
This tax year was my first year as a full time blogger and I am so dreading doing taxes. Thanks for the tips.
Yeah, I have no clue how to go about the blog stuff. I’m glad you’ve got it figured out!
Taxes used to be not so hard, I mean we had it down.. save home repairs, improvements, records, donations.. meaning toss it all in my husbands desk and he put it in the appropriate file. This year we found out we inherited half a company (shared between 3) on 12/31 and inherited the other half on 1/1. We have to file ‘corporate’ taxes as a family ??? I am so confused and unprepared. The company has great records, but for the first time ever we will need to file an extension and with two other families… We didn’t know about any of this until the final hours of 2013! We will be paying lots of accountant fees I’m sure .. Well, what fun would life be if we weren’t learning from crazy thrown at us experiences, right?
Oh my gosh!!! That sounds like a nightmare!!!
Taxes are on the same list as having teeth pulled. Not my fave either! I guess the better organized we are the less painful the inevitable will be.
Agreed!
You know, I wait to the last minute every year and worry about it for months. I’m going to take your advice and just file right away this year. Thank you!
You go, girl!
Thanks for the wonderful reminders. Backing up files and saving receipts may be the two most important suggestions you’ve listed!
Very true!!!