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Wednesday, April 10, 2013

Its that time of the year!

Yes folks, here in the USA its tax season!
I am not a professional tax-y person, and this information is not to be taken as legal advice. If you need legal advice regarding your tax situation hobby/small business you will need either a CPA or a lawyer, or both.

What I am is a person who does my own taxes. Why? Because I went to Tax blockheads one year, and sat there while some person basically used a proprietary version of Mac'n'tax and charged me almost $500, and still wasn't able to handle my tax situation--I got double taxed on a 401K roll over.

So if Im going to get double taxed on things like 401Ks I can do that my self for just under $100.

Ok so here are my annual tax tips:

• Keep your records, they don't have to be pretty they should be consistent. Meaning receipts need to always go in the same place scrambling for that one receipt is a pain, and is avoidable.

• Get a filing system, it doesn't have to be pretty, it has to be functional.

• Set up a spread sheet to track your income and expenses and mileage. AND if you SAVE AS at the end of each year, and clear contents, you don't have to reset up your spread sheet and you are tracking the same type of expenses each year.

• Be consistent year to year on how you record your information. It really does save time and hassle.

• Try to be consistent in your filing system, use the same size envelopes to store receipts from year to year.

• Speaking of receipts, when you generate a business expense, write on the receipt right then and there how much and for what. Most receipts these days are those heat sensitive slips.

• Have a special place in your wallet/bag/purse where you can keep receipts until you enter them into your spread sheet and file them.

• Track and record your receipts monthly, or quarterly. It will save you a ton of time.

• When you are getting ready to do your taxes take some time to prepare the items you need. Schedule that time. Gather the information and resources, and then at another time do the actual taxes. Trying to get it all done at once is a big set up for frustration.

• Not sure what information you are going to need again this year? Review last years records. Because you have a consistent filing system, locating last years taxes is a breeze.

Those are my ten tips for this year.
Oh and if you end up owing a big sum of money, its not my fault. But keep in mind the government does take payments, so you don't have to break your bank--learned that one the hard way.
And if you are making money, make sure you set aside around 30% or so for your taxes, because no matter what cuts they make to the social security system, you still have to pay into it.

1 comment:

Shelley Graham Turner said...

Wow this great advice! Thanks.