5 of the Best Ways to Organize for Taxes


Every year when January 1st rolls around, in addition to ringing in the new year, a nagging internal voice arrives. It’s a little whisper that starts softly, saying “you know… now you’ve got to prepare your taxes”. And that little voice continues to grow louder and louder as April approaches. I seriously dread preparing our taxes. I have a twisted love for numbers and processing information, but I still wish elves would magically take care of everything overnight and leave me a stack of prepared tax documents to take to my CPA in the morning.

Can you relate?

However, I’ve noticed over the last few years that I spend more time procrastinating our tax preparation than I do actually preparing them. (I know… big surprise) The procrastination occurs because I’ve convinced myself that getting everything ready will literally take FOR-EV-ER. Maybe that was true at one point in our lives, but over the years I’ve developed 5 simple steps that I take throughout the year that really make our tax preparation painless and easy.

5 of the Best Ways to Organize for Taxes

**Disclaimer: I’m not a CPA… I’m a creative entrepreneur. This post is not intended to provide tax advice, but to help you be more prepared when you meet with your own accountant or financial advisor. This post contains affiliate links. Many of the items listed can be found at your local store or online. However the links below have been provide for your convenience.**

Spreadsheets are Your Friend

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Before we got married, a dear friend sat us down and helped us create a budget. Tyson and I were both employed at the time, and having a budget allowed us to account for every penny that we earned and quickly get ourselves out of debt. This budget is a major lifeline in our marriage and one that we still use today. It’s evolved over the years as our finances have changed, but I’m confident it’s helped us avoid numerous arguments over money and it’s kept us afloat when economic bubbles (like with the tech and housing markets) have burst.

Now that we are both self-employed, utilizing a spreadsheet for our budget has allowed us to manage our money and make smart decisions. We have a worksheet created for each category that we spend money on. We set aside a predetermined percentage (decided on with the direction of our accountant) of income from every project into a tax category on our spreadsheet so that we have it available when we are required to fulfill a tax obligation. These are funds that go completely untouched and are separate from our savings and household needs. It’s completely unsexy, but so worth it when it’s time to write that check for taxes due.

Whether you use a paper or digital system, having spreadsheets for budgets, projects, inventory and editorial calendars make a world of difference.

Create a Paper Filing System

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Use file folders (similar) and labels to create a filing system for all of the documentation you receive throughout the year. This filing system doesn’t have to be fancy. Really, anything that you think you will need to reference during tax season should have its own folder. To set-up my filing system, I actually used my budget categories to begin with and then I’ve added folders as needed. Creating a basic filing system helps reduce the paper clutter that can quietly grow in your home and allow you to quickly find anything that needs to be referenced. Not only do I find this filing system invaluable during tax preparation, it helped keep me sane tracking everything after my husband’s accident last year and our recent move.

Utilize Bookkeeping Software

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For years I’ve used a desktop version of Quicken or QuickBooks … and both have their pros and cons. Recently I’ve begun using the online subscription of Quickbooks that I LOVE. It syncs up with my bank and downloads our transactions for me. I only need to go in and make sure that everything is marked in the correct category before reconciling and balancing my checkbook. It’s been a HUGE timesaver.

Whatever version you choose to use, bookkeeping software will allow you to run reports of all of your business activities and quickly tally what you’ve spent (when and where) for your accountant. Trust me… it’s SO much easier to look at your grand total for office expenses from a report than it is to wade through a sea of receipts.

Update Your Records Once a Month

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This is probably my most important tip and the keyword here is MONTHLY. I’ve found if I update my records WEEKLY (even better!) it only takes minutes. However, we all know that I’m a procrastinator at heart so I make sure that at MINIMUM everything (budgets, paper filing, bookkeeping software and calendars) are updated every single month throughout the year. Then when it’s time for tax preparation, everything is up to date, easily accessible and ready for me to work with. Seriously, no magic or elves are needed.

Use Your Calendar

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Set reminders on you phone or paper calendar for sending out estimated taxes, information to your CPA and any other tax filing deadlines. Build in extra time for preparing so that you are taking care of your financial obligations with plenty of time to spare.

All of these tips are things that we’ve learned through trial and error… struggling to get ready for a meeting with an accountant which resulted in me being grumpy with my family or in tears. Not wanting to repeat those experiences, I’ve fine tuned the process and we’ve gotten to an easy system that I didn’t even realize I had at my disposable. The only thing missing was to send that nagging voice packing. No more need to procrastinate with these 5 simple steps.

5 of the Best Ways to Organize for Taxes | Storypiece.net

Who organizes everything for your taxes? Do you procrastinate this annual task? What other tips would you add to this list?




4 comments

    • Danielle says:

      Thank you, Sharon! That means a lot coming from you. 🙂 My hope is that it will encourage others and make life a little easier for those that struggle with all the prep that goes into tax season.

  1. domesticdeadline says:

    This is great! We just finished out taxes (hubby and I do them ourselves). I used to dread doing them but now I like to do them and get them processed, especially since we always get money back! I’d love for you to share this at linkup, you can find it starting every Friday on my blog, http://www.domesticdeadline.com

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