Taxes 101: The Do's and Don'ts of Managing Finances
If tax season becomes stress season every year, with a little planning and effort, preparing your tax return can go smoothly. Tracey Evans, owner of First Tier Accounting LLC in St. Paul, Minnesota, specializes in helping small-business owners manage their finances. By using her list of tips that follow, the present tax season can be accounted for in no time.
- Plan ahead. Purchase a bookkeeping program, such as QuickBooks, and/or consider hiring a bookkeeper to help manage your finances. Evans also recommends that you consult with an accountant at year-end to review your bookkeeping, and ensure your records are accurate and complete before filing your taxes. Enlist a CPA or other qualified accounting professional to assist with budgeting, cash flow and tax planning.
- Manage your paperwork. Organize and file important documents like bank statements, receipts and invoices. You don’t need a sophisticated system — keep it as simple as one file folder for each month's documents — as long as you have an organized method for keeping your important records. Scanning your documents can also save space and provide back-up for paper documents.
- Back up your files. Spend time every week on bookkeeping tasks. Be sure to back up your data daily, especially if there's been a lot of accounting activity.
- Keep current. Stay up to date by reconciling bank accounts, updating your accounting system and maintaining your books so they're current and accurate when you need them.
- Fail to file. Using the shoebox method for storing important materials will only create chaos. Keep your receipts, invoices, bank statements and other documents organized to help make preparing your taxes a snap.
- Blend business and personal. Keep business expenses, income and accounts separate from all personal finances to avoid confusion at tax time.
- Create bad habits. Resist the temptation to procrastinate. Maintaining an active routine with your recordkeeping and account reconciliation will keep you on track. It may seem like a pesky detail, but setting aside 30 minutes or so once a week will save you time in the long run.
When you get in the habit of these fundamentals, you'll save time and frustration — and stress — later on.
Perhaps this advice has convinced you to hire an accounting professional. Evans makes these recommendations for finding the right one:
- Choose someone who is responsive and timely. A good indication of their responsiveness? How quickly they return your call or email. You want to be on their priority list, not their back burner.
- Ask around for a personal referral. If a friend or family member endorses an accounting professional, odds are you'll be in good hands.
- Look for someone with experience in your industry. Many accountants specialize in a particular field. If you own a business, choose an accounting professional who understands your work.
- Find one who's right for you, personally. Like in picking a doctor or dentist, subjective preferences play a role. You'll be forming a long-term relationship with this person, so if your communication skills clash, keep looking.
Racing the clock
April 15 is fast approaching. Feeling the time crunch? We can help. Go to FedEx Office to print, fax and send in your important documents. And because FedEx Office is a designated private delivery service of the IRS, when you use FedEx® services to deliver your tax return, your tracking number is official proof that you made the deadline.
- Need to send your advisor hard copies of receipts and tax forms? The self-service fax machines at FedEx Office locations are user-friendly and convenient — some are even available 24 hours. Or use FedEx One Rate® to ship your original paperwork or duplicate copies to your advisor. It’s simple, flat rate shipping with the reliability of FedEx. FedEx One Rate pricing is based on only three factors:1
1. Where you’re shipping your package.2
2. Which FedEx Express® packaging you select.
3. Which FedEx Express 1-, 2- or 3-day package service you choose.
- Want to save your hard-copy files electronically? If you have only a few documents, take advantage of the self-service flatbed scanners at FedEx Office. Bringing in batches to scan? Save yourself some time and ask a FedEx Office team member to scan the documents for you and save them on a thumb drive or a CD.
- The computer rental stations are available at most FedEx Office locations 24 hours a day, 7 days a week. Use these to scan your tax return information, monitor your emails and even complete your tax returns online. We remove your documents and browser history from our workstations after every session, so you can feel secure.
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1Terms, conditions and weight limits apply. Proper packing required. See the FedEx Service Guide for details.
2The flat rate is determined in part by three zones from origin to destination: generally 0–150 miles, 151–600 miles and 601-plus miles.