Ok guys, It’s after the first of the year and 1099s/W-2s should have shown up by now. First things first. Get your year-end papers together. Get 1099s, W-2s, expenses and whatever else OUT and in a pile (a pile that is PROMINENT. Don't let them sit under anything else.).
Most importantly, EXPENSES. If you don’t have a bookkeeper or an accountant you send those things off to on a regular basis you need to create a document that breaks down each category with the total of each category. For example, any meals that you can deduct need to be added up and the the total entered into the doc. MEALS: $400 BOOM done. If you DO have a regular bookkeeper, biz mngr, or accountant and all you need to do if send them all of your receipts? Just stuff those receipts in manila envelopes or labeled large plastic baggies to send to them. The purpose of this is to make receipt clutter go away and easy to put away. Shoe box, ziplock, sexy pouch? If you don't have to sift through your own receipts just shove them into something easy! Just put them AWAY! If you give yourself an easy place to stash receipts there's no excuse. Grab that weird onion paper and shove it!
Ways to contain and keep track of receipts without a scanner or spread sheet. Bless my bro for this great idea…
I ONLY save the receipts that I plan on deducting. It makes itemizing easier. Truly, credit card and bank statements have all of your expenses on it. However, if you bought non itemized things on the same receipt as itemized things (ie. toilet paper for my house is not deductible but the packing tape I use for work were bought in the same place and that IS deductible.) Save the receipt and circle the itemiz-able things then file, throw in the show box, envelope, or that spindle (see above). If you buy anything deductible with CASH... SAVE THOSE RECEIPTS! Don't overly sub-categorize day to day files. Over categorizing or sub-categorizing gets most people in trouble of overwhelming an already overwhelming situation. For example, if you decide to categorize monthly and, all of the sudden you have to go out of town or some crazy shit happens in your life, you will F yourself. Receipts, then, are everywhere and you blame yourself for not keeping up. NOT. FAIR. TO. YOU.
If you like sub categorizing...I recommend filing by deduction type rather than by the month. Month doesn’t matter in the grand scheme of things only the type…Meals, Travel, Supplies etc. EVEN if you file quarterly. Get large envelopes and label them. If you have to.
SIDENOTE...I have 2 separate businesses. I have 4 separate files for each. (Acting Income Organizing Income...Acting Expenses and Organizing Expenses) The day I choose to add everything up is MINE. I choose to make it special. I order out, have a cocktail, and reward myself the next day for gettin it done. I take this day to take out each receipt out separately and organize by type (mileage, uniform, healthcare). I find that taking out my expenses once a year and separating, by type, then entering it into a .doc file is easiest for me. I need a lot of table/floor space. ; ) Then just add them up and bring those .docs to your accountant.
AFTER YOUR TAXES ARE FILED
Keep all returns always. Only the returns. And hide. Put them in deep storage you only go to once a year. Receipts within 4-7 years (IRS can’t come after you for anything after 7 yrs so shred or toss any old receipts from 2009-10 (7years) and shred or trash. Honestly, 4 years is safe if you know you have no unclaimed income. Or, have committed fraud.
I also throw my yearly day-planner in there just in case. It has more reference to my work than I could muster with memory.
Take all returns and use either large envelopes or hanging files, label accordingly, and tuck away for the following year. You should never exceed anything larger than 2 of these…
There are a trillion ways to get prepped through the year for taxes. These are just a few ideas. Please let me know if you have any questions or your own ideas that might help someone else! Here's hoping you get a sizable return!!