Tithing, taxing, time to prepare!
The Busiest Time of the Year (if you're an accountant)!
The last week of January is a busy time for bookkeepers and accountants. They are gathering all the required documentation to issue K-1s, 1099s, W-2s, 1096s, etc. You've probably been receiving these forms in the mail. Here are some quick tips for what to do with all that paperwork and the emails that seem to fly around this month that you know you need to hang on to....
Create Your Mint In-Box
If you already started your Mint In-Box last week then you know how liberating it is to just throw everything that comes in the mail related to your Mint (bills, receipts, tax notices, etc.) in this box. Do the same with the tax forms that arrive in the mail except keep a large manila envelope in your in-box and put the hard copy K-1s, 1099s, 1098s, and W-2s in this envelope. You can open them up if you like, however I recommend not doing this until you start on your annual tax returns (more on that next week).
If you have some of these forms being sent via email or with an on-line login, I recommend creating a folder on your email platform (for example MacMail, Outlook, Gmail, etc.) where you immediately drag and drop these emails from your in-box into new folder. You can call it something like "2014 Tax Forms." If you created a Mint In-Box/folder on your mail system then make this new folder a sub folder of that.
If you like to "tag", just add the tag "2014 Taxes" to the files/emails for a search mechanism on your computer.
Start Thinking About Your Tax Returns
Do you use a CPA to file your returns? You probably received their tax organizer package by now along with a checklist of items they need and information they want you to complete.
Do you do your returns yourself? I recommend buying/downloading the software at the end of next week. There are always late changes to the IRS code which take a while for the software companies to get updated so the last thing you want to do is file a return with software that still needs to be updated.
The IRS officially began accepting returns for the 2014 calendar year on January 20, so you can file at anytime now as long as you have all the required forms needed and you know your tax software is up-to-date. All the forms you need from others should be in the mail to you no later than January 31.
Everything that comes in the mail relating to your tax return (or that you think you might need), just put in that envelope in your Mint In-Box or the special folder on your computer.
Check to See if You Need to Issue any 1099s, W-2s, or K-1s
Are you an officer/owner of a corporation, LLC, or partnership? Check to see if you are required to issue any 1099s, W-2s, or K-1s. If you have a bookkeeper or accountant, they'll let you know. If you haven't heard anything, it's not a bad idea to check in with them and make sure they are on top of this. The IRS is cracking down on 1099 reporting so best to get clear on the rules.
K-1s report income or loss activity to shareholders or partners depending on how the ownership is structured. These are available once the tax return for the entity is completed and will be provided to you by the CPA that performed the return. Or, they will be generated from the tax software you selected if you are doing it yourself. Corporate returns (and corporate K-1s) are due March 15, 2015. LLC and partnership returns (and their corresponding K-1s) are due April 15, 2015.
Gathering
This is always the tough part. Trying to bridge the gap between what money is and represents and this dry and stressful stuff like tax returns, forms, etc. Remember from the Money Holiday Happiness course that taxing came from tithing. Figuring how much you have in your storehouse from the end of the growing season available for the community storehouse. It's a bit more messed up and complex today, however you have more control over how much you pay than you have in the past -- especially if you have a good Mint system. So gather your documents in one place and then forget about them. Next week I'll give you a checklist to make sure you have everything together to make the following months as easy as possible during this tax season! Happy Minting!