Get Ready for Tax Time Early

December 30, 2009

I know, I know. We haven’t even rung in the New Year yet and I’m reminding you about filing taxes? Well, we all get very busy this time of year and we all need a nudge to help us get organized and plan ahead. I ran across a press release today that brought this subject up and I thought that I would share. Af ter all, sharing is caring, as my friend Nancy says.

The points in the release are directed to small business owners, but some of the points make sense for each of us personally as well. The following five points were provided by DebtGuru.com. More can be found at: http://www.debtguru.com/finances/top-twelve-tax-tips-for-small-businesses.

The release notes out that tax deadlines do vary according to when a business’ tax year ends, so the first thing you need to take note of is when your tax year ends. You don’t want to miss the filing deadline and risk having to pay penalties and interest. So … the first thing that you want to do is:

1.   Keep a calendar. Deadlines can sneak up fast., especially when you have a lot of bills, payroll and other things to juggle.
2.   Start now. Don’t wait until the last minute and then pull out your shoebox of receipts to give your tax accountant. Even the best accountant can make mistakes when forced to pull it all together at the last minute.
3.   Remember your retirement plan. Who would you rather pay: yourself or the government? When you contribute to an IRA, you reduce the amount of income taxed by the government, and you set aside money for retirement.
4.   Keep all documents. When it comes to taxes, being a pack rat is not a bad thing, so that when a question arises, you can produce any document at anytime. What should you keep organized and filed?
     Credit card bills and receipts
     Old checkbooks
     Bills and invoices
     Mileage logs and documentations
    canceled checks or proofs of payment (VERY important)
   Any evidence that supports deductions and credit claims on your tax returns
5.   Start planning for next year. Throughout the year, keep your taxes on your mind. When making decisions for your business — such as purchasing office space, incorporating, or hiring extra help — consider the implications those changes may have on your taxes. Such careful considerations could help you make wiser, more successful choices for your business.