Tax time has almost come and gone, so hopefully you’re at the end of your journey or at least approaching the signpost. If not, you may need to hurry and file for a tax extension, lest you encounter bigger problems down the line. Even if you do manage to complete your taxes on time, though, the early-April slog can signal a larger issue at hand.
Taxes are generally tough, it’s true. There’s a lot of information you may not normally deal with to learn and laws and rules change every single year. On top of that, you have to deal with your business/personal lives while all this number crunching is racing through your head.
So it’s not simple. However, it’s not supposed to be impossible, either. If you’re not properly organized, then taxes suddenly become nigh undoable. Even worse, you start to dread the next year’s tax time, meaning you’ll put it off longer. This can make things even worse.
Break the Cycle
It’s time to break the cycle of fear and torment and get your tax life in order! One of the worst things you can be going into tax time is disorganized. If you can’t find the forms and papers you need, how are you supposed to finish in a timely manner?
It also can drive you crazy when things just aren’t working out. You think you’ve gotten everything ready to submit to the IRS but then you stumble upon yet another receipt or another form you forgot to fill out. It’s terribly frustrating and makes tax time 1000 times worse.
This is why organization is the key. If you know where everything is, every last invoice and deduction possibility, you’ll have way less trouble filling out your forms. Hey maybe you’ll even get a refund this year… (You wish.)
Track Income and Expenses
If you don’t do any other record keeping all year, you should at least keep track of your business income and expenses. The IRS requires that you report all income or eventually get caught and face penalties. And since you’re reporting all of your income, you want to track all of your business expenses, too, since those are tax deductions that can lower your final tax bill.
If you already use Shoeboxed, you’re one step ahead since your documents are already securely stored and organized in the cloud. Their powerful integration options — like the one with Outright– easily sends your documents and data into programs you already use.
To take it one step further, sign up for Outright and let us import all of your banking, credit card, PayPal, eBay and other business financial information. We’ll take the hassle out of tracking income and expenses, making it almost impossible to be disorganized at tax time.
Did you know that as a business owner you are eligible to deduct your home office space and the miles you drive for business? Last year Outright peeked into our aggregate data and noticed that quite a few of our users weren’t taking these two potentially valuable deductions. In other words, they were handing money over to the IRS when they really didn’t have to.
The internet is full of rumors that taking the home office deduction will trigger an audit. While this seems to be an exaggeration, if you’re worried about an audit, we have your back. Find your industry in the Outright Audit Calculator and compare your numbers to industry averages. If a number is extremely high compared to industry averages, the IRS may red flag your return for a second look.
After you get reorganized, make sure to keep it that way from now on. When 2014 pops up and you get all the necessary info to start your taxes, go ahead and begin ASAP. Waiting until the last minute is just as bad as starting the process completely disorganized, and could lead to problems later. Plus, the earlier you start means the more time you have to fix errors you find.
Show of hands. Have you filed your taxes already? If not, what’s your biggest tax time challenge?