Prepare for Next Year’s Tax Season Today

organizing tax recordsRight about now, are you scrambling to find everything you need to file your taxes? The problem: you can’t find everything you need because you haven’t taken the time to get organized. 

Who has time for that, you say? Well, if you don’t want to be in the same boat next year, don’t put it off any longer. Get organized now! Here are some tips:

Step 1: Create a system to organize your records. This process can be as simple as putting your receipts in a folder to using software to track your invoices, bank statements, and receipts. Whatever you choose, get in the habit of putting receipts all in one place so that you can access them anytime. Make sure to document the specifics of all expenses, and pay particular attention to travel or entertainment expenses. State the purpose of the expense and who was present at the time of the activity.

Step 2: Watch your cash flow. Keep track of your accounts payable and accounts receivable. It is also important to keep abreast of what items are tax-deductible and which are not.

Step 3: Monitor your balance sheet and income statement. These two elements will provide you with a realistic picture of where you are at all times. The balance sheet should list your assets, liabilities, and equity. Your income statement will show your revenue, and you can measure against last year to see if you are on track.

Step 4: Write down questions that came up in past tax years and bring them to your next tax appointment, or set up another appointment after tax season is over. Consider a quarterly meeting with your accountant or tax professional to make sure you are navigating in the right direction. It’s easier to avoid mistakes than to pay for them at year-end.

Talk to us!

Do you sleep like a baby when tax season is approaching? If you’ve got organization down to a science, please share your tax season survival tips with us here!

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