by Barbara Boone of Productivity Solutions
Tax time is stressful for most people. However, if you have your information organized ahead of time, it can be less stressful. Follow the directions below to create your own organizing container for tax back-up receipts.
Once the receipts are categorized, it will be much easier to figure out what each category total will be. Take the totals to your accountant instead of having him/her work with the receipts. That will cost you more time per hour when you can do that part yourself. If you use a computer program like QuickBooks, the totals are already figured for you, if you have previously taken the time to enter all of the information. You are still required by the IRS to keep the hardcopy receipts for at least six years.
- Make a list of all of the deductions that you take for your business.
- Check with your accountant or financial person to see if you forgot any deductions. These are some of the common categories for deductions: Advertising/Marketing, Cell Phone, Credit Card, Donations, Insurance, Office Expenses, Books/Magazines, Professional Services, Professional Dues, Training/Seminars, Travel, and Taxes, Internet, Equipment, Bank Statements, Credit Card Statements. Include a compartment for Mileage and Income. You may have more or different categories.
- Buy an accordion file folder with the alphabet labeled. One without a top works better than one with a top. The reason you get one with the alphabet labeled is that you need as many compartments as possible. You will not use the letters, but will instead create labels according to the names of the deductions you have chosen.
- If you have an electronic label maker, use it to make the labels for each compartment of the accordion file. If you don’t have an electronic one, hand-write the labels.
- Lay the labels out and put them in alphabetical order. It is easier to file receipts this way.
- Attach the labels to the file folder.
- Place the file folder in a file cabinet next to your desk if possible. It should be close to your desk so that you log in the receipts into your computer files and then immediately file them into the accordion folder.
- When it is time to do your taxes, total each category and take the information, along with the back-up receipts, to your accountant.
© 2011 Barbara Boone, Productivity Solutions. All Rights Reserved.
Barbara Boone is a professional organizer and productivity consultant for small businesses through her business, Productivity Solutions. She specializes in paper management and file set-up to help business owners save time, money and space in order to be more productive. She is a speaker for small groups and a published author.