It's that time of year when we try to get our books organized so we can file the dreaded income taxes.
I can't tell you how many people wait until the last minute to get all of their receipts in order.
As a small business consultant, it's my job to advise clients on the proper ways of conducting business.
Filing income taxes is no different.
Here are a few tips that I've recommended to some of my clients.
1.
Naturally, don't wait until the last minute to do anything.
Keep track of all expenditures throughout the year as they occur.
There are many free online applications and smartphone apps available to help.
2.
Keep all receipts no matter how trivial you might think they are.
Let your accountant determine whether or not an expense can be considered a deduction.
3.
Try to be as organized as possible.
Don't throw your receipts in a shoe box and forget about them.
Get an accordion file and organize all of your receipts by month.
4.
At the end of your tax filing, put all of your documents together in a 3-ring binder or something of the sort.
Remember, the IRS can go back 7 years so you need to be sure all of your tax information for any given year is together.
I scan and print my receipts (I can get multiple receipts on a single sheet of paper) and I keep them with that year's tax return.
I bind my taxes using a simple binding system I purchased from Staples and I use the self-adhesive folder tabs to separate the years.
A few of my favorite things..
..
Outright -www.
outright.
com: Free online accounting software.
It even calculates your estimated tax! ExpenseCloud -www.
expensecloud.
com: Available online and for many smartphones.
Keep all of your expenses in one place and you can even scan your receipts or take a picture of them with your phone!