Who’s preparing your taxes? Think about who will be preparing your taxes, and what sort of information they’ll need. Preparing your own taxes is a lot easier if you make a checklist of what documents (W2s, bank statements, etc.) are needed. With a checklist, you’ll know if any important information is missing when you sit down to prepare your taxes. If you’re going to be giving your information to a tax preparer or CPA, ask them how they would like to receive your information. Some tax preparers want a list of expenses, while others are happy to take receipts and do the totaling for you.
Plan in advance. If your system thus far has been to toss all your receipts into a shoebox, now’s the time to spend one or two hours a week (or just 15 minutes a day) gathering and sorting your documentation. This will save you lots of time and stress when you or a professional are actually preparing your taxes.
Record your expenses. If you don’t have an organized way of keeping track of your deductible expenses, you may be missing out on big savings come tax time. Create a list of your expense categories using a simple list, a ledger, or a computer-based system, such as NEAT Receipts. A great benefit of using NEAT Receipts is that not only will the system assign tax categories to your expenses; it will also store a digital copy of your receipts, statements, and other supporting documentation. That way, if you ever were to get audited, all your information will be safely stored in one place.
Keep everything together. Scattered receipts and expenses can lead to lost deductions – and lost money. Instead of losing your receipts or keeping them in a shoebox, purchase an inexpensive accordion folder or scan them into NEAT Receipts. If you choose an accordion, label the folder’s slots with your expense categories, and as you get a receipt, drop it into the corresponding slot. If you’re using NEAT Receipts, your receipts will automatically be categorized. Either way, totaling your expenses for each category at tax time will be a breeze!
What about next year? Don’t wait until next year’s tax time rolls around to start thinking about your 2009 taxes. Start using your new, more organized strategy for keeping track of your receipts and expenses now! Staying on top of receipts and expenses throughout the year can eliminate tax-prep related stress.
Paying taxes is a fact of life, but the stress surrounding tax preparation and keeping track of your receipts doesn’t have to be! Use some of these simple strategies, and when the taxman cometh this April, you’ll be more than ready.