by Guest Contributor Shannan Painter
Does anyone like tax season? That may be up for debate. You don’t have to anticipate tax season like you look forward to Christmas, but there are a few ways to make it less dreadful!
Organize your personal paperwork
Start a folder and label it “2011 Taxes”. Throughout January, you will begin to receive tax-related documents such as W2s from your employer, 1098 mortgage interest statements, 1099 interest & dividends earned, etc. (Envelopes should be marked with “Important: Tax Information Enclosed”. ) Each time you receive a piece of mail, put it in your designated folder. All documents must be mailed by January 31st, so you should have what you need together by the beginning of February. Your accountant can supply you with a “tax organizer” that contains exhaustive checklists to make sure you have every document you may need.
Organize your business paperwork
Your accountant wants to see year-end totals. If you don’t have this together already, it will cost you a pretty penny to have your accountant add it up for you. In addition to your income and expenses totals, gather together dates large assets were purchased (cameras, lenses, computers and other equipment) mileage logs, home office square footage and any health insurance premiums you paid as a self-employed person.
Schedule an appointment early
Don’t wait until the last minute when your accountant is swamped with returns. You will receive the best time and attention if you don’t procrastinate.
If your accountant needs additional information from you, make it a priority to get it to them as fast as possible.
Understand Accountants are human
We can’t read your mind, and as much as we try to remember details about your personal life, it is your job to get information to us. Do a thorough job of filling out your tax organizer so we can maximize your deductions.
Finally, if you find a CPA who is encouraging you to do something dishonest, RUN THE OTHER WAY. Tax fraud is serious business, and is NOT something you want to get tangled up in. A good accountant will find all available deductions and credits, but will never suggest you do something shady.
If you decide to do your taxes on your own, read carefully through each step of the tax preparation program. You may be surprised that it doesn’t cost much more to hire a professional, and it may provide the peace of mind you just might find is worth every penny. Keep your eye out for coupons during January coming from CPAs looking to expand their client base.
Need help organizing your business finances still? Check out our SNAPSHOT spreadsheet.
Just started your business? Our BUSINESS 101: Setting Up Shop self-study guide will help you walk through all the steps you need to get your business off on the right foot.
Confused about what is or isn’t deductible for your business? Our brand new Deductions Guide will help walk you through the most commonly misunderstand business deductions.
About the Author: I graduated Magna Cum Laude with an Accounting Degree from the University of Montana. Instead of pursuing a career in public accounting and being stuck behind a desk for 70 hours a week, I turned down jobs at big accounting firms to pursue a different love. I chose instead to work from home where I live with my husband, two boys and a puppy named Growler. I live a glamorous, exciting life working from my living room in my pajamas, cleaning crayon off the walls, driving kids to school, playing superheros and taking care of a little dog that likes to refinish furniture with his teeth. I get to work with fun, creative & artistic photographers and help them understand that numbers can be our friends!
Visit Shannan at her website Accounting for Photographers, and on her Facebook Page today!
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