For most of us, tax season isn’t a lot of fun. Maybe you throw your receipts, notes, forms, and papers for the year in a folder–or maybe you throw them in the trash. Either way, you’ll end up with a lot of sorting, searching, grumbling, and cursing before you crunch the numbers.
Since we own a small business, we hire a CPA to do our taxes. It’s worth the expense! The logistics of after-work appointments, babysitting, and scheduling are tough, so we need to have all of our documents in order before we go see him.
A few years ago, we were missing some key information and I spent my lunch hours at work running documents to his office, bringing things back for signatures, and so on. That’s not how I want to spend my lunchtime!
Here are the sanity savers I use at tax time to make sure everything is ready for our appointment.
Make a list.
Yes, we’ve joked about me being Type-A in the past. But there are certain times when a list just makes sense.
Here’s my Tax Prep Checklist. I keep it in my computer and pull it up when it’s time to make our tax appointment.
Among other things, the list reminds me to log Papa’s petty cash transactions for the shop, calculate miles driven for charity work, and get the tax IDs and total costs for the kids’ daycare.
Who can remember all these little details from one year to the next? And who wants to waste valuable cerebral real estate doing so?
Check your facts.
We’re always going through our closets and cabinets looking for items to donate. Since I wasn’t sure of the value of the clothes we were donating, I estimated a value of $20 per bag. That was waaaay too low!
The IRS website states that you can deduct the fair market value of the items donated, so I checked the Salvation Army for values (the IRS doesn’t provide these). Even if I valued everything at the “low” rate, it’s still worth hundreds more than I previously thought.
Keep it together.
We’re on a high-deductible health plan now, so I need to keep every receipt–for copays, prescriptions, office visits, you name it. I taped a 5×7 manila envelope inside my orange tax folder to store all of those receipts. We just drop them in the envelope and everything is contained.
When we’re done with taxes for the year I label the folder, put all the tax forms and backup documents inside, and breathe a sigh of relief.