Are You Tax-Ready?
Are you tax-ready? We are in a new year and the inevitable is here. It’s time to get ready to file your personal or business taxes for the previous year. By this time, your W-2’s are arriving and your 1099’s should be coming in.
Hopefully, you keep records in order all year long that will help you now. If your records are all over the place, start organizing ASAP and avoid those 11th hour headaches that come on April 15th.
How to Get Tax-Ready:
- Check with your tax professional to see what’s still needed. Likely, you already receive a questionnaire or checklist from you CPA. It’s time to get it out.
- Manage your overwhelm. Tackle each step one at a time. Checklists can seem long and intimidating so, take on each item separately. This helps you maintain your focus and be better prepared.
- Collect all the forms you need. W2, 1099, 1098, and K-1 are just a few that you may need to include. If you work from home be sure to include utility bills, rent payments, mortgage information and square footage of your work space.
- Organize a designated “tax” area in your home or office. Put together a tax binder & an accordion folder (for your end of year tax preparation). If you organize a system now, tax time will be a breeze!
- Create a desktop filing system. Place it within reach of your work area. Make this process functional & simple, so you can file a receipt or document in a jiffy!
- Label file folders with categories that relate to your business like “Bank Statements”, “Invoices” or “Contractors” and include a folder for each itemized deduction.
- Create a Tax Binder. It’s good to have a paper back up for all your data entry work. If I need to look up something quickly, all you have to do is flip to the page. A binder is often divided into the following categories: Income, Invoices, Contractors, Expenses, Mileage and some Receipt Pockets.
Additional Resources:
If you have not received a checklist from your tax professional, visit Turbo Tax. Here’s a list of common deductions.