One of the best tips that I can offer someone who is looking to reduce their stress levels around tax time is to get more organized. An often-cited phrase and mindset is that the more organized your surroundings are, the better you will feel, and the better you will perform. Especially with everything, and everyone, clamoring for our attention, focus, and energy on an almost daily basis, it can be difficult to decide what items to actually prioritize. My 5 ways to get organized for 2018 tax season are pretty efficient so make sure to try at least 2 of them and you will notice the impact.

You’re welcome. 😉

Tax time only comes once a year, but it can feel like it lasts for months! Follow these steps and you will be feeling like a million bucks!

 

First, does this sounds familiar?

losing time 5 ways to get organized for 2018 tax season

It feels like this year went by so fast that most of our new year resolutions went unaccomplished. I know this happens to everyone, but while I’m sure this is true it definitely doesn’t feel like it. Having a business is just one of the most time-consuming things anyone can do, and even if we don’t have a full-time business, side business project or startup, having a family and taking care of all the things that a family needs are more than enough to drive a weak-hearted person insane! Whether is baseball practice, buying medicine, daycare, etc., etc. – the list goes on – we tend to put important things on the back burner… meaning we either forget or simply put them aside for a later time ‘when we have more time’ to take care of them. Then suddenly!!? THE YEAR IS OVER.

As a Bookkeeper and tax preparer what I see however is that parents, business owners, and really everyone these days tend to ignore the most important year-end factor – receipts and keeping track of what we buy and where our money goes. If we track them better, I estimate that the majority of us would get up to 15-20% more in tax returns. Sometimes more!   So although tedious, unfortunately, we are better off preparing for taxes while we do our Christmas holiday shopping – especially for some who’s biggest expenses happen during the holiday season. Those donations, children related expenses like daycare and other things we spend on could be included – but you need to know exactly what is ok for your situation.

If you are like most and struggle to keep up with expenses throughout the year, maybe you aren’t sure what’s ok to claim as an exception or not… give us a call and we will be more than happy to walk you through this. Easy.

(915) 996-3981

 

how much does a bookkeeper cost
bookkeeping price sheet estimate in el paso

 

 

1. Track your donations and dues

If you donate to different charitable organizations and groups or even pay dues for professional organizations, which can range from animal rights groups to dues paid for for realtors and even CPAs, you might be able to take that contribution, or a portion of it, as a tax deduction. You will either receive an email at the end of the year letting you know how much you had donated, or will receive a receipt explaining how much of your payment or contribution is tax deductible. In my experience, these organizations are very good at providing this documentation, but if you have not received your documentation by the end of January I would follow with an email or phone call.

2. Determine whether to itemize or not to itemize

As an individual, you basically have two options, itemized deductions or a standard deduction, with how you want to file your individual 1040, and making that decision now will help you figure out what you need to save and keep track of during the year. One thing to keep in mind is that not every dollar you spend will be deductible — for the 2017 tax years (filing in 2018), the expenses you are seeking to itemize  (specifically medical) must exceed 10 percent of your adjusted gross income (AGI).

Another thing to remember is that everyone, whatever your filing status, is eligible for a standard deduction. For single filer taxpayers, the standard deduction is $6,300 — it is important to work with your CPA or tax professional to make sure you do not end up getting less. Fortunately, the IRS has a form that helps you figure out if you are better off itemizing or taking the standard deduction.

If you choose to itemize your deductions you will, in general, have to keep track of more documentation during the year. Some of the most common itemized tax deductions include, but are not limited to medical expenses, charitable contributions, state and local taxes, foreign taxes, mortgage interest deductions, mortgage points, health insurance if you are self-employed, and losses related to natural disasters. There are more options out there, so be sure to work with your tax adviser to stay current.

 

who hires a bookkeeper, el paso business bookkeeping What does a Bookkeeper do?

Learn the difference between a bookkeeper and an accountant. 

 

 

3. File your finance documents

We all get way too many emails during the course of the year, but taking a little time to auto-file where these emails go can save you a lot of stress come next tax season. Bank e-statements, credit card e-statements, retirement account information, and any business expenses should either be stored in a tax file in your inbox, or put in a tax folder during the year. A little time now will save you a lot of time next tax season.

4. Save business expenses

In general, if you are running a small business or startup, and are trying to claim certain items as business expenses during the year, you are going to have to justify these expenses to the IRS. My recommendation is to always save, or track, any items you think you might even want to claim as a business expense. My two favorite methods of saving business expenses are to either have everything sent to me electronically so I can save the emails for tax time, or have it come through the app. If technology jitters make this less appealing, I suggest making a PDF of all business receipts and storing both the original and digital copies. Do not forget to back up your records, either manually (with an external hard drive) or with a cloud service provider.

5. Know your tax date deadlines

April is well-known as tax month, but there are several other dates that are important during the year. Quarterly taxes for your business, for example, are due the 15th of April, June, September, and January, so make sure to file and pay if you need to. Lastly, you should have received all of your tax documents, including W-2’s and any 1099’s, by January 31st. If you find yourself missing documentation be sure to reach out to keep yourself from falling behind. Your outreach efforts might include your IRA program manager, former employers, or companies you did some consulting for during the year. Again, most organizations in my experience are very good at getting these documents out the door, but it is important to keep an eye on where these documents are.

Sometimes the most painful time during tax season is opening a shoebox full of mismatched and unorganized documentation, and trying to make sense of it. That is stressful for both you and your tax preparer, and might actually result in your missing out on an important deduction or credit that you are due. Taking some time during the year to get, and stay, financially organized can really pay off the next time tax season, or some other big financial occasion comes around.

 

Don’t let more time pass, don’t do like last year. Let us help you get started the right way and you will see that Tax Season doesn’t have to be a pain!

how much does a bookkeeper cost
bookkeeping price sheet estimate in el paso

Leave a Reply

Your email address will not be published.Required fields are marked *