New Year. New outlook. New organization…. Go!
OK, maybe we can’t help with all things on your New Year’s to do list but we can certainly help you get ready to prepare your taxes.
If you are a business owner make sure you or your accounting department has taken care of all end of 2019 payroll, tax payments, contributions etc. Check here and here on our articles on year end tasks and make sure all the relevant boxes are ticked. Even if you missed something don’t delay – especially when dealing with tax payments, the more time that passes the more penalties can accrue.
Review your financial statements.
A once over won’t do. Take time to really review all of your income and expenses and think back over the year. This is the time to find missing transactions if there are any, especially income as a business owner. Filing revised taxes later is a hassle and extra expense.
Make sure your employees and independent contractors get their forms by January 31.
Review your retirement contributions. You may have some extra time to contribute to an IRA account. Check with your tax preparer before you plan on filing.
Organize Your Documents
Whether you are filing an individual tax return, a business return, or both you need to have all your documents in order. Gather together:
- Income documents – W-2s, 1099s
- Retirement account contributions
- Educational expenses – Form 1098-T
- Medical bills
- Property taxes and mortgage interest
- Charitable donations
- Classroom expenses
- State and local taxes.
For business make sure you have all of the following documents as well:
- Income statement
- Balance sheet
- Bank and credit card statements
- Payroll documents
- Last year’s business tax return
- Partnership agreements
- Accounting documents
- Asset purchase details
- Depreciation schedules
Make your appointment with your tax preparer in advance of the deadline to file! Nobody likes to be rushed, especially if you have to locate additional documentation.
File an Extension?
Of course, we should all file our taxes on time. But the IRS understands that life happens and sometimes that is just not possible. But you do need to get your extension request in on time!
Review and Revise
Start with the up side – what did you get right last year? Maybe you had all your documents in one area of your office last year. Yay! But figuring out after the fact what that note meant and whether that $100 was income or an expense, uh not so much?
Now is the time to think through how your information is best organized for your personal and business needs, and how best organized for tax filing. They will not line up exactly but maybe you can find a compromise between. Maybe one folder for each month of receipts and documents, or alphabetical files for all receipts and documents. Maybe you prefer to organize by type if you need to locate files in the middle of the year.
How ever you decide to organize head in the direction of a little bit better than last year!