LAST ONE TO THE TAX PREPARER'S OFFICE IS A ROTTEN EGG!
Okay, so maybe that isn't the sentiment that typically occurs to you at tax time each year. If you're one of those people who usually procrastinates just a bit.... puts off gathering those receipts because there's “plenty of time yet”.... let's try to change things up. Here are some tips and advice to make filing a breeze this year:
Find last year's tax return. This is a good guide to what you'll need for this year's return. Look it over and note any changes; maybe you have new machinery this year or retired the old computer, which will affect your depreciation. Just looking through the paperwork may remind you of questions you had for your CPA or tax preparer.
Go ahead and make an appointment with your tax preparer. It's been a whole year since he/she's seen you, and I'm sure you've been sorely missed. Seriously, make the appointment so you have a deadline to get your things together. Give yourself plenty of time in case your tax preparer needs you to search for other documents.
If this is the first year you've been self-employed, or you are using a different tax preparer this year, be prepared to discuss how you operate your business. This discussion helps your preparer determine what expenses are usual for your business and helps him or her make sure you aren't forgetting anything.
So what about those receipts? Your preparer doesn't actually need to lay eyes on your receipts, and should accept your word for the totals. But in the event you are ever audited, it’s vital you take care of those receipts. Make sure you document everything, like the time and location of the purchase and which job or client the purchase was in relation to.
Mileage can make a big difference on a return. Keep a daily mileage log, being certain to write the January 1st and December 31st odometer readings. Once again, document all mileage and keep notes on which job or client you are working on, and where you traveled to and why.
In 2015, the Affordable Care Act could make an impact to your tax return. Be sure to ask your preparer how this may affect you personally, as well as your business.
Remember to ask your tax preparer about next year. What changes are you thinking of implementing? Will any of the proposed tax changes for the following year affect you? The sooner you know, the sooner you can begin planning.
Maybe you'll never be someone who gets excited at the words “Tax Preparation Day” on your calendar. But maybe if you scribbled “ICE CREAM AFTERWARDS” on there...?