Simplifying Tax Time

Grrf.  I just finished filing our taxes for last year. I find it difficult to understand why our taxes are so complicated.  With schedule C’s, home office deductions, and the like, Turbo Tax generated over 100 pages of forms. So, although this year was easier to handle than last year (in part due to better record keeping), I offer some suggestions to follow throughout the year to make tax season a bit less of a headache, especially if you are self-employed:

Maintain a dedicated credit card and charge all business expenses to it — make sure the card offers a year-end summary which consolidates all of your purchases.

Keep receipts well catalogued — Here’s a technique I picked up from my last company where the accountant required that expenses be submitted in an orderly manner.  After each trip or purchase, affix the receipts per category on a sheet of paper (or scan them on one page).  Total the receipts per page and write the total in a corner.  This prevents a small receipt from being lost, and helps in dealing with lots of irregular sized receipts. At the end of the year, totaling is quick by adding the numbers on the corner of each page.

Be Consistent– if possible use the same accountant, or the same tax software, from year-to-year.  Last year’s information is often stored and makes this year’s work more efficient.

Hope these are helpful, becuase they work for me.

see more hints at Works for Me Wednesday