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Blog: If Your Money Ain't Happy, Ain't Nobody Happy
Tax Time Trouble



If you dislike tax time every year and you put it off and avoid it at all costs, it ends up costing you more because you have to pay for an extension.  You're not alone. As I get my taxes together let me help you get your taxes together or give you some tips to make it easier.  There are a few things you can do every year to make it easier, especially when you have a home-based business.  Knowing what to do with papers from last year in files or in piles can be helpful at clearing some space and put things back in order.  Yes, tax time takes some time but every year you can improve the preparation more and more until you're ready to get your taxes in by the end of January or February.  I just want to get everything done and to my tax guy as quick as possible and I hope you can do the same! 
 
Computer programs can facilitate the process much more.  The programs that greatly help me keep finances in order during the year and produce the reports I need quickly for tax time are Quicken and QuickBooks.  For personal finances using Quicken, a very user friendly program, keeps your check register nice and neat and reminds you of bills coming due and also automatically creates reports for where you spent money and how much you spent.  If you are doing your bookkeeping by hand you are missing out!  You can easily keep track of your checking, savings or any other personal bank accounts.  They do have a Quicken program for home and small business that might be appropriate to get you started putting your business finances on the computer and then eventually stepping up to QuickBooks, which is made by the same company as Quicken but tracks business finances more effectively.  These programs really save time during this time of year.  I use Quicken to generate how much my personal expenses were for utilities which can be partly used as a business expense since I have a home office.  Also when entering during the year if my husband or I had to pay for business expenses from our personal checking I just categorize those expenditures under the category "business expenses" and run a report for last year and it automatically adds up all those expenditures as well as listing them individually. 
 
Mileage is often hard to keep track of during the year for business.  I tried so many times to keep track of every trip but it was ridiculously hard!  Here is what I do and it seems to be fine for taxes.  I purposefully get oil changes in the beginning of the year and at the end of the year since they record the mileage.  By subtracting those two numbers I get the mileage for the year and then times it by the percentage of how much I have used it for business.  Here's an example.
January 2, 2007  50,0000 miles  – December 28, 2007 75,000 miles = 25,000 miles for 2007
25,000 miles x 75% used for business = 18,750 miles used for business for 2007
 
Personal bills.  If you only have personal bills for home expenses then your last year's bills are pretty much not needed.  That is why having Quicken is nice because if you want to reference what you paid in years past you can do it in minutes if not seconds.  Otherwise just keep your bank statements that show how much you paid to those places you paid bills to and highlight them on your statements when they come in the mail.  You will feel comfortable getting rid of the actual bills and you know you can find the amounts of bills easily on bank statements.  You can clean out your file cabinets easily and start fresh this year and go through the purging process again right away in January of next year.  Personal taxes are quite easy if you keep papers filed neatly and get your W2's. 
 
Business bills and receipts.  If any of you have been in business you know these documents are extremely important.  Having QuickBooks can keep track of expenditures.  Don't over categorize them though in the program.  For example if you buy paper for your computer then you don't need to categorize it under "paper" instead memo that it was computer paper but put it under the category "Office Supplies".  Take it one step further by filing the receipt in a receipt expanding file under the category "Office Supplies" so you won't have to mull through piles of receipts at the end of the year.  The best thing you can do for your tax guy or gal is to run a report of income and expenses, they will tell you exactly which report they need and you can find it easily under the reports. If you are doing your bookkeeping by hand then get out the file with all the phone bills in, for example, add up all the bills paid for the year for the phone and then put on a Word document or piece of paper the total amount for the year, then on the next line add up another type of bill and so on.  This will relieve some headaches for your tax preparer and also keep you educated of what you are paying out.  Remember if you only have one year's worth of bills in your files this is an easy process. 
Afterwards you can empty out your files by keeping the categories, like phone bills, together with a paper clip or staple and putting it in a hanging file folder with all the other 2007 documents.  You can put your tax documents you receive back from your preparer's office right in the front for quick reference. You can get rid of the bills after seven years from the date your taxes were FILED not from January 1 seven years ago.  You should always keep your tax forms. When you get rid of the bills that accompany that tax year then just file the tax forms together in one hanging file for quick reference under a file label for that decade like 2000-2010 since all you will have is a few forms from each year.  I always like to have one file cabinet just for archive so I can go to one place to find any previous year's items.  It also helps with seeing the ones that are over seven years and ready to get rid of. 
 
I know there are lots more topics associated with taxes, but if this can get you started in the right direction that's the biggest thing…getting started.  Remember, if you are overwhelmed and don't have things in very good order then use this year to get started in the process.  I have to constantly remind myself that everything is a process not just done with a snap of the fingers.  Happy Tax Time! 

posted on: 2/20/2008 11:30:00 AM by Triste Horrell
category: Finances


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If Your Money Ain't Happy, Ain't Nobody Happy


by Triste Horrell

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About Triste:

Being an organizing expert makes one want to be a "showroom" in all areas of life. However reality can hit hard when you're a mother of small children and a military wife and own an organzing business. Of course Triste would like to have a picture perfect Better Home and an even Better Garden. Throw a Pottery Barn in the backyard for exceptional creative time to become the wiz-woman for all the ideas and inventions that the world could not live without. But Triste has settled on the fact of telling herself "I can be perfect in my mind and no one can mess up my space there!" In reality Triste is very self-motivated and has true business accomplishments like having SYSTEMIZE since 1997, the first home and business organizing firm in the state of South Carolina. She has been repeatedly recognized in her Greenville, SC area for her organizing expertise and makeovers on local NBC and FOX news, Greenville News, local magazines such as Greenville Magazine and Upstate Parent and NPR radio. She has turned people's lives around by focusing on what she calls the "four building blocks of being organized" consisting of space, time, financial and personal. This is even represented in her business logo. "That's what I'm in business for, turning people's lives around!" Also applying her popular 3 Steps to Systemize have not only organized her clients but KEPT them organized for years.

Triste's Website:

www.systemize4u.com


Downtime Activities

  • Reading Magazines
  • Spending time at our cottage
  • Keeping our Westie pretty
  • Putting tealights around after the kids are in bed
  • Adventures with my awesome hubby
  • Making microwave smores...just for me
    1 graham cracker, broken in half 1 small piece of chocolate 1 big marshmellow On one side of cracker put piece of chocolate and marshmellow on top. Place in microwave and heat for approx. 17 seconds (while cooking replace marshmellow on top of chocolate if needed). Put other half of cracker on top, eat and enjoy and watch out for oozing chocolate!

My Organizing Tool-Box

  • Time - Outlook
    This is a great way to keep papers off the desk and track where you need to go, task list, jot down quick notes on the virtual "post-its, keep up with contacts in the virtual Rolodex
  • Personal Finances - Quicken
    This simple yet practical program keeps your bank accounts in tact...did I mention simple?!
  • Business Finances - QuickBooks
    I have used this program for years and have set many clients up on it. It is a must for keeping track of business transactions and keeping tax time easy...push a few buttons and out come the reports, your done and your tax preparer loves you.
  • Space - turntables
    I love these things! You can put them in cabinets, the fridge, garage, and closets. They are inexpensive, easy to find and available at any discount store and you can even find fancier ones. If you are not sure what they are, they are the white (or other fancier kinds) and spin around like a lazy susan, you can have a single or double-tier one for spices.
  • Personal - Magazines and Internet
    I love to look at magazines and the internet for good articles on personal development, pictures for decorating inspiration and fun projects to do with my family. I keep my magazine subscriptions to a minimum (3) so I can read them and enjoy each one. I look for things on some of my favorite websites for whatever fancies me at that time.
  • Online Recipe Boxes
    Use these on some of your favorite websites, bring the laptop into the kitchen while the recipe is up and you never have to have the paper clutter. One of my and my husbands favorites is Williams-Sonoma.


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