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This year, I've been awful about getting my taxes done. Normally, I call my accountant by the end of January to make an appointment for the end of February. I've had a lot on my plate in the last year, from a cross-country move, to changes in the work situation for my husband and for me, and the fact that my son is in a new school in a new town. It's been crazy, and now I find myself scrambling to accomplish everything that needs to be done.
Luckily, even though I'm late getting my tax documentation turned into my accountant, it's not turning into a mad, awful rush. This is because I've long been a fan of organizing my taxes throughout the year.
How to Organize Your Taxes Year-Round
One of the best ways to stay on top of your tax situation is to organize your taxes year-round. Don't just think about your taxes during tax season. Instead, make it a point to consider your taxes throughout the year. Here are some of the things I do to keep my taxes organized all year long:
- The tax folder: I keep a manila folder, labeled “tax receipts” on my desk. Every time I have a receipt that's deductible (charity, business, etc.), I put it in the folder. That way, I don't have to hunt up the documents come tax time. I use a similar strategy for receipts that are emailed. I have a folder labeled “taxes” in my email. Nested under the parent category, are things like “business travel,” “charity,” and “investments.” Anytime I receive electronic receipts or documents, I can “file” them in my email.
- Quarterly review: If you want to organize your taxes to take advantage of deductions and credits throughout the year, rather than trying to cram them in at the last minute, consider a quarterly review. I wasn't as vigilant about this as I should have been during the last two quarters of 2014, but normally, about the time I make quarterly estimated tax payments, I review some of my strategies. Could I make some tax-deductible green upgrades to my home? What business trips do I have coming up? Is it time to increase the duties I give my virtual assistant? Do I have enough wiggle room to increase my charitable donations? How are my investments? Is now a good time to sell something at a loss for the deduction? Figure out where you stand, and strategize throughout the year, and your cash flow will be smoother.
- Use tech tools: Finally, make sure that you are using tech tools available to you. There are plenty of great tools like Shoeboxed and Evernote that can help you document, organize, and search your tax-related receipts and expenses. It's also possible to use accounting software like Zen Payroll, Freshbooks, and Xero to help you stay on top of your situation. Take advantage of the tools you have available to you.
When you organize your taxes throughout the year, it makes it much easier to get it together during tax time. So, while I let tax season get away from me this year, I am still going to beat the tax deadline without too much trouble. And, because I'm so organized, my accountant will only mildly annoyed at me this year for waiting so long, instead of livid because he has to organize everything for me.
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