There's been lots of talk about taxes on Simply Stated this week, not surprisingly since today is tax day. Hopefully, you've gotten your taxes filed or have requested an extension. Some of you might be lucky enough to already have your refunds in hand.
With 2008's returns wrapped up, now is a great time to start thinking about and prepping for 2009. You're already in the mindset of your taxes and the things you'll need for next year are fresh in your mind. So it's time to set up a system for keeping the info you'll need next spring organized and accessible.
Last November we talked about making the move to a paperless office. (You can see part 1, part 2, and part 3 here.) And as it turns out, going paperless can be helpful for taxes too. The IRS will accept digital documents, so you don't have to worry about keeping the originals.
If you're going to go paperless you'll most likely want to use a device that will scan your documents and make them searchable, or use a service that will store them on a sever and allow you to access them online (they will be searchable documents too). Then you can categorize them based on what they are and how they relate to your tax return. If you start it now, (and keep up your system) tax time next year will be a breeze.
If you're looking for a device to scan documents at home try the NeatReceipts Scanner $199.95 and see how you can use it for your taxes here.
If you prefer to use a service and have someone else scan your docments try Pixily.com, where plans start at $14.95 per month depending on how much you need scanned. (It works kind of like Netflix, where they send you an envelope and you send in your documents to be scanned.)
Any other suggestions for prepping for tax time starting now?
My first suggestion is to use some sort of computerized checkbook for all your finances. You can associate spending categories with lines on your tax return. Then when you need those totals next year, it’s easy to produce a report.
My second is not to save too many documents. Know what you need and what you don’t. Throw out/shred documents that you don’t need either because you have the more recent one or because it’s not relevant to your tax preparation.
I use a trio of online apps to keep track of my bookkeeping:
1. Shoeboxed for receipts
2. Outright for tracking cash flows
3. FreshBooks for invoicing my clients and tracking payments
The best part? All these apps talk together and give me a comprehensive breakdown of where I’m getting my money and where I’m spending it.
One of the first things to do when prepping for next years taxes, is if you paid in have your employer change the information on your w-4 form. This will allow for you to have less to pay in all at one time. Also look into any possible deductions you might receive for the next year especially if something has changed in your life. This way you will know what paperwork you will need in order to take advantage of the deductions.
Also if you Itemize then you should keep track of your mileage from your home to all medical offices including a hospital that you have appointments at. This mileage is actually tax deductible, the amount per mile changes every year.
If you volunteer that mileage is also tax deductible.