How to Prepare for Tax Season Way Ahead of Time
You’d probably have a hard time finding someone who enjoys tax season. Maybe hardcore accountants or those who always get a refund find it rewarding… but for the most part, paying taxes is stressful.
Still, there are ways to make things easier for yourself by preparing way ahead of time.
Here, we’re going over three tips to help you get organised well before the deadline approaches. So, let’s get started.
Keep Your Receipts Organised
We all know the feeling of scrambling to find our business receipts when tax season comes around. We spend all night squinting to read the faded receipts and scouring through emails to find purchase confirmations.
To avoid that stress and make sure that you’re writing off as many expenses as possible, keeping your receipts organised throughout the year is essential.
Perhaps you’ll use an email folder for all your email receipts. You might print everything out and keep hard copies of anything you buy online. Plus, most bookkeeping software can even help you digitally keep track of those flimsy paper receipts that you always seem to lose.
At the start of each new month, go through all your receipts from the month before and keep them organised. Your future self will thank you.
Automate as Much as You Can
Automation is key to staying on top of your taxes before things get down to the wire.
Some tax software can track your mileage in realtime if you constantly travel for work. You might also set an automation in your back account to put aside a certain dollar amount in your tax fund to make sure you’re not caught off guard.
For small business owners and anyone who’s self employed, you can also automate payments through your accountant to pay your taxes on a quarterly basis so you’re always up to date.
Long story short, take the time to set those automations once and you’ll be easing a lot of worry.
Don’t Be Afraid to Outsource
Many of us want to do everything ourselves so that we feel fully in control. But, that’s just a recipe for things not getting done. In short, outsourcing is an extremely undervalued tactic.
Marketers outsource their copywriting, financial advisers outsource their statement planning, and you can outsource your taxes.
You’re probably already outsourcing the actual tax filing to an accountant. But there are also other ways to outsource your taxes to make life easier when the deadline comes around.
We already mentioned bookkeeping software but this is really where it’s at. With certain kinds of software you can outsource all your tax tracking from mileage to business spending without lifting much more than a finger. Set it and forget it.
If you run a massive company, you might be able to outsource every aspect of tax planning to a specific employee. So, if paying taxes seems to be completely anxiety-inducing, it makes sense to budget for someone else to do everything for you, especially if you have the means.
To be fair, taxes are always a pain but they don’t have to be totally debilitating.
By preparing for tax season way ahead of time, organising everything month by month versus year by year, and outsourcing the things you really don’t want to do, you can stress less and focus on more of what’s important to you.