Try to keep everything in a spreadsheet or document. Keep your documents organized. There are smart scanners that scan in receipts and add them to a spreadsheet – or do it by hand. If you organize every month, or every week, for just a few minutes, it will save you a lot of time and headache at the end of the year. Contact us to see how we can help you be more organized. In future blog articles we will detail our latest Tax Organizer.
Accounting software or even Excel spreadsheets can also help you stay organized. Most companies these days use Quickbooks, so it would be a matter of keeping Quickbooks updated. Also try to reconcile your bank accounts once a month, and if you really can’t do that, at least once a quarter (you will still have to reconcile one month at a time).
If you’re freelance or self-employed make sure you keep your personal expenses separate from your business expenses, but it’s always good to keep track of all your expenses.
During the year you must ensure that you have all the W9’s completed for each independent contractor or LLC. Did you issue 1099’s to all of your freelancers that were paid more than $600 for 2011? If you don’t issue a 1099 at the end of the year, the IRS could disallow that expense and you would not be able to write it off.
If you’re on a W-2 there’s not much to do unless you have unreimbursed job expenses. If your employer doesn’t pay you back for certain business related expenses, you may be able to deduct them. So if you’re on a W-2, keep track of your unreimbursed expenses. The most common types of these expenses are clothing and/or uniforms that can only be worn to work, travel to seminars and meetings (NOT your regular commute to and from work), and business related meals & entertainment. You may have other unreimbursed expenses that we did not cover; ask us about what you’ve spent your personal money on.
We’re available year round for questions. You just need to reach out to us and we’ll get down to it right now rather than deal with it during tax season. Procrastinating costs time and money. We can help you make quarterly estimated payments to avoid penalties and interest at the end of the year.
Unlike many other accountants, we’re available all the time. We just gained a client this month (August) who had his 2011 returns done by another CPA, but he came to us because he said his accountant couldn’t meet with him for a month, while we were available on the same day he called.