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When it comes to tax time, preparation is key. As December 31st quickly approaches, I have been working on getting together all of our paperwork to end our fiscal year and have everything ready to send to our accountant. I have created a foolproof system for my husband and I to stay organized throughout the year so that when we start receiving our year-end financial statements, we can simply plug them in and file. Today, I want to offer some of those tips to help you get organized for tax time in your household.
1. Create a filing system
I picked up a multi-pocket filing folder at the store that has 12 separators (one per month). Each month is labeled accordingly and we file all receipts and important statements in the folder as soon as we get them. This eliminates our need to have to go searching for lost receipts throughout the house or vehicles. Having everything in one place to begin with eliminates chaos.
2. Maintain a spreadsheet on your computer
You don’t have to get fancy with this, Excel or even a Google Docs Spreadsheet will work. I create tabs at the bottom with the names of each month. Since my husband and I are both self-employed, I set up a column for all of our incoming payments, as well as a column for any business related expenses we incur. I update this sheet several times a week to ensure that I have good records to match our receipts that we are filing away. If you work for someone else, your income will be tracked by them and you will be sent forms at the end of the year, however it is still a good idea to track any expenses that you may be able to deduct and keep a spreadsheet that you can update once a month. At the end of the year, this sheet is handy to be able to print out and take to your accountant.
3. Research deductions
As new tax laws are put into place each year, study up on what your family will be able to use as deductions. The time you take to research will assist your accountant in helping you get all the deductions that your family deserves. Remember that your accountant is not a mind reader and may not be aware of everything that has happened in your life the previous year. It never hurts to do a little research on your own and communicate with them.
4. Keep previous tax paperwork handy
If you had a different preparer assisting you the previous year, always take at least two years of back tax paperwork with you when you meet with your new accountant or tax preparer. This helps them see the deductions and depreciations from the previous year and can save you a lot of time and money in the long run.
5. Don’t procrastinate
This tip is easier said than done, right? When it comes to tax time however, this is the biggest tip that you can receive. When you find yourself rushing around to find things, there are a lot of deductions that you might miss. Being prepared is ultimately the best, and most rewarding, option for your family.
Did you know that you can get your tax refund direct deposited on a Visa Prepaid card so you don’t have to wait for a check in the mail? You can find out more information and play the Know Your Numbers Game to win a Tablet PC and other great prizes on the Visa Prepaid Facebook Page
Do you have a tax organization tip that you would like to share? If so, please comment below!
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