The majority of your tax documents that you will need for your 2012 tax return are required to be mailed out to you by January 31, 2013. What this means is a lot of extra mail in your mailbox either on the street or on your computer. Based upon my experience, people will fall into two basic groups when it comes to filing their tax return. The first group is super organized, always on top of their tax returns, including planning throughout the year, and wants to get their return filed as early as possible. The next group procrastinates as long as possible either because they don’t want to face how much they will owe or they are not organized. Regardless of what group you fall in, it always pays to make sure you are organized in order to not overlook any deductions or income in case Uncle Sam comes knocking in a year or two after you have filed your return. Here are 12 tax return organization tips to make this filing season your best yet.
1. Start organizing your 2013 documents NOW. No better time to get a head start on your 2013 taxes than at the beginning of the year. As you go through your 2012 documents see where your current system needs to be improved or develop a system for organizing your documents as you go through the process of filing your 2012 tax return.
2. Decide if it is time to outsource the preparation of your tax return. I distribute tax organizers to my client’s for them to make sure they have everything covered to prepare an accurate tax return. With the complex tax code, it is easy to overlook things.
3. Do you normally have a large tax refund or owe more than you would like to by April 15th? If so, make changes to your Form W-4 to make sure you get as close to break even as possible. Never a wise idea to give the government your hard earned money earlier than the due date.
4. Double check your year end tax documents by comparing to your pay stubs, mortgage statements, bank statements or investment statements. Errors do occur and it is easier to correct before your file your tax return than afterwards. Do not assume anything.
5. Make sure your budget takes into account your taxes. For instance, I would always start with your gross income and have your income taxes, Social Security taxes, etc. as part of your expenses so you know how much money you are paying into the government. It is your money and the current system acts like it is automatically their money.
6. Determine how long you need to keep documents and destroy old ones accordingly. There are great resources for this at www.irs.gov or you may always contact me.
7. Outsource your accounting for your business if there are not enough hours in the day to devote to the reason you are in business. This may be tough financially if you are just starting a business, but this makes the most sense as you grow your business. Extremely important for your business to have a accurate financial statements at all times.
8. If you are delinquent on filing tax returns for prior years, make an appointment to get them filed today. The fear of the unknown causes more stress than is necessary. Deal with it and move on.
9. Look back at prior year tax returns to make sure you didn’t miss anything for the current year.
10. If you decide to use TurboTax or similar software, understand what you are sending to the government and keep your tax documents for support. Also print out a hard copy to put with your documents or scan and back up to a secured source. Not fun trying to get a copy from the IRS if your computer crashes with the only copy on the hard drive.
11. Get organized in other areas such as your retirement goals, insurance goals, etc. since they all have an impact on either your income or estate taxes.
12. If you can’t get everything organized by the due date, file an extension. It is better to have everything than to estimate numbers. However, do not wait until the due date of the extension. Get it done as soon as possible.
This can be a stressful time of the year for most people as they settle with the government. Hopefully these tips will reduce any stress and give you a fresh start this year. As always, contact me if you would like to discuss in more detail.
Accounting & Tax Expert – Lisa Stickel CPA – Nashville, TN
Lisa Mays Stickel, CPA serves as President of Stickel, CPA, PC. She started the firm in May 2005 in order to provide the highest quality of accounting and tax services to small businesses, individuals and nonprofit organizations at reasonable fees. Her goal is to make a difference in the lives of her clients. Her vast experience includes working at a Fortune 500 company when she started her career after graduating from Western Kentucky University, to being a partner in a local accounting firm and working at a regional accounting firm. Lisa is also a member of the American Institute of Certified Public Accountants and the Tennessee Society of Certified Public Accountants.
While providing accounting and tax services to her clients is a high priority, she also believes in giving back to the community. Lisa served the accounting profession for six years as a member of the Tennessee State Board of Accountancy with two of these years as the Secretary. She has also served on several NASBA committees. Speaking to college and high school students about a career in accounting and mentoring are also ways she enjoys giving back. Her past community roles have included serving as the V.P. of Finance and Treasurer for the Junior League of Nashville, board member for the White House Chamber of Commerce and All About Women and President and co-chair of the PTO at her childrens’ schools. In 2005, she was appointed as the first female Alderman of the City of White House.
The one distinctive service that her firm offers is that Lisa has 20+ years of accounting and tax experience so you receive partner level service at lower fees that you would normally spend at other accounting firms. The foundation of her success is from referrals from clients, family and friends who have been built on trust and respect. Allow her passion for accounting and tax services to serve you with your needs so you can focus on your passions.
Outside the office, Lisa enjoys spending time with her family and friends, running, reading, going to movies and traveling.