BY ANDREW KABATCHNICK, CPA
Preparing for tax time, whether you are preparing yourself or you have a professional, can be a very stressful time for most people. However, there is a lot that can be done to help reduce the anxiety. From organizing you receipts and bank statements to planning ahead and discussing changes with you accountant ahead of time, you can greatly reduce the last minute craze that most people feel. Business and personal clients can do a lot to help make tax time as smooth as possible. It might require some work during the year, but it will definitely be worth it.
Many business clients wait until the last minute to put together their bank statements, expenses, and receipts. Whether you are tracking with Excel, QuickBooks, or another program, it is important to put together your books and records on a somewhat regular basis. Normally, entering your information on a monthly or quarterly basis (although it may take a little time and getting used to) can save a lot of hassle and stress at the end of the year. You can also save time and space by scanning and saving your receipts electronically (as long as the scans are clear). Many times, your accountant will not require the actual receipts, but will suggest holding them in case of an audit.
Individual taxpayers can also save a lot of anxiety by planning ahead. Keeping organized records of you deductible expenses is extremely important. Keeping Excel tabs of your donations and medical expenses on a monthly basis can help reduce the amount of time spent last minute. Another important point is to speak with your trusted financial professional before making any important decisions. The may not change your plan, but at least they can give you an idea of what to expect when tax time comes. Will the sale of your main or vacation home be taxable? Can I write off my business trip? Prepare yourself ahead of time!
All in all, tax time can be very stressful for most people. However, there is a lot you can do to plan ahead. Do not wait until the last minute when you can speak to your trusted financial professional. Also, many people prepare their own taxes to save some money, but do not realize that mistakes can cost them. Plan ahead and use the resources you have available to make the process much smoother.