How To Organize Yourself For Tax Time

By Darci Forde
4D Professional Services

Does tax time stress you out?  Fill you with anxiety? Do you know where all of your tax documents & receipts are?  I used to start stressing right around this time. Do I have what I need? Did I save that receipt?

Is this the conversation you have with yourself sometimes or am I just telling on myself? Don’t leave me hanging here!

Darci Forde, 4D Professional Services

If you are honest, you have had these conversations or similar ones with yourself or your accountant. So let me help ease your anxiety a bit and show you some simple ways I organize for tax time.   If you organize a system now, tax time will be a breeze!  You may even enjoy the process (maybe).  

Let’s start with setting up a designated space in your office specifically for taxes. This is especially important for those of you who itemize your deduction at tax time (Contractors, Independent, Consultants, etc.)

Now, this is what I do for my small business but the same principles can still apply to your personal.

Step 1:

Use a desktop filing system. Place it within reach of your work area.  If it’s out of sight, your work will surely pile up, so placement is key! You need to make this process functional & simple, so you can file a receipt or documents in a jiffy! 

Step 2:

Label file folders with categories that relate to your business.  Yours may be different from mine. Please speak to your accountant to find out what deductions you are able to claim.  

This is how my files are labeled: (1 folder for each)
• Bank Statements
• Taxes Paid
• Invoices
• Contractors
• Advertising/Marketing
• Office Supplies
• Supplies
• Travel/mileage
• Insurances
• Legal & Professional fees
• Receipt (folder for each month)
• Other Expenses

Step 3:

Designate & label an accordion case for your end-of-year tax documents. When you are ready to file your taxes, place all documents inside the accordion & take them to your accountant. (Trust me, your accountant will thank you, they may even shed a tear!).  Once my taxes are filed, I take everything out of the case and place it in a manila envelope, and put it in my filing cabinet labeled with the year.

Now those are my steps, but here is a quick look at my process. When I run any business errands or purchase something that is tax deductible, I place the receipt in a mini accordion that I keep in my car.  Once I get home, I take the receipts out and place them in the file for that month. Then I log my mileage (use an online mobile system for tracking mileage). Any mail I receive from the day, I open and file accordingly or trash.

This is a learned habit, but I hope I’ve got you thinking about organizing your taxes throughout the year, instead of preparing them a week before they are due.

Till next time!

Disclaimer: I am not an accountant. Everything in this post just explains how I organize my taxes to make it a little easier for me.

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