Peaceful taxes is when preparedness meets checklists!
Take it One Box at a Time
(an easy way to prepare for your taxes)
Last week I wrote about creating a Mint In-Box and within your Mint In-Box, keeping a large manila envelope for all those things that come in the mail that say "important tax information enclosed"! Just knowing everything is one place I've noticed removes 80% of the tax stress for my clients.
The Next Step
Keep putting those important tax notices in your Mint In-Box and in your large manila envelope.
This week, pull out your 2013 tax return(s). Familiarize yourself with the numbers, the types of deductions, and anything else you remember was difficult or a pain to gather last year. This can be stressful and confusing. Take though, an objective look. This is your money. This is your money being sorted into different areas to determine how much you will pay to the community storehouse. Too many people stop and just close their eyes and push everything off to their tax accountant with a "you do it, I don't need to know, just make it go away." That's fine, however, taxes take quite a bit of your money. All the way from sales taxes you pay, to those ticky tacky cents tacked on to your utility and phone bills. In fact if you added up the amount of money you pay in taxes, you would be astonished.
Preparing for your annual tax return(s) is your way of consciously looking at where your money goes. Yes, everyone has to pay taxes and I personally like libraries, firefighters and peacekeepers, and driving on paved roads. I do know though that many people, in their haste to "just get it done" either wait until the last minute or trust their tax accountants (who also tend to wait until the last minute) to file their taxes and thus miss out on a careful analysis of all financial activities that could provide unknown tax benefits lost in the rush.
Don't Do This to Yourself or Your Coins
Remember, this is your money. And with the amazing amount of people and companies out there who provide tax preparation services, not to mention the do-it-yourself software programs out there, you can find something that will work within every wallet. The sooner you can gather all the information you need, the sooner you'll be ready to either submit for your refund OR, figure out if you are missing anything that could reduce your tax burden.
This week or weekend, find your tax return(s) from 2013, and review the information it contains. Then, download the checklist I created (see below) and start grouping your information according to the categories on the checklist or, create your own based on what you see in your tax return(s) from the prior year.
For example, if you are a sole proprietor, look at your Schedule C from last year for your business.See how the tax return showed your results. Then, either create reports out of your Mint system that shows these same categories with 2014 results OR, start going through your bank statements and add up the numbers based on the categories/line items on your Schedule C.
This is where having a Mint system makes life so much easier. In fact for most people with a good Mint system start looking at their taxes in October to figure out what they can do before year-end to save themselves some coins. Being able to click a few buttons and email something directly to your tax accountant or even export directly into a tax software takes a big burden off your shoulders and puts you in control of the process.
Regardless of how you've tracked (or not tracked!) your coins in 2014, you'll feel good once you file your 2014 taxes to get that monkey and stress out of your life. So, onward!
A Simple and Effective Checklist
Click the ledger image below to download a really simple yet effective checklist to help you begin gathering what you need for your 2014 taxes. Your tax accountant may have sent you what's called a "tax organizer" and personally I find these a bit confusing, tedious, and frustrating to complete. So start with the below and next week I'll share with you some tips for additional items that you may have disregarded for your taxes that will save you some of your coins (things that most CPAs don't ask and don't appear on those tax organizers).
Until next Friday, Happy Gathering!