Filing taxes is an arduous task, but one that can be made less arduous with organization and some helpful tools. Getting a head start ahead of the April deadline also goes a long way towards reducing stress. Starting now also lessens the rush, which could lead to mistakes or overlooking some tax savings. With that in mind, here are a few tips and tools to make the filing taxes as painless as possible.
Put all the dates on your calendar
Before tackling the task, put down all the important dates onto your calendar. This will help you plot out your schedule and break down the tasks into smaller, easier steps. The deadline to file an S-Corp or partnership return or extension is March 15. For everyone else, the deadline to file is April 17, 2018. If it doesn’t look like you’ll make that deadline, you can file to get a six-month extension.
Gather all documents and receipts
Whether you plan on filing taxes yourself or with the help of an accountant, you’ll need to gather all the required documents – namely proof of income and proof of expenses. Documents you’ll need to show income may include W-2, 1098, 1099 forms or paid invoices. For expenses, you’ll need to collect documents showing payment of property taxes, charitable donations, medical bills and other items that can count as deductions.
Business owners can also deduct expenses such as office supplies, business meals, and related transportation costs. It’s a good idea to jot down who you went to dinner with and the business purpose. If you’re ever audited, the Internal Revenue Service may ask you not only for the receipt but also to corroborate the expenses.
Since many receipts and other documents, including 1099s, are electronic these days, it’s helpful to have your own printer. The PIXMA TR8520 is a compact and versatile home office printer that can print wirelessly – in color - from your smartphone or iPad. Be sure to check your ink levels too.
Establish a filing system
Once you have all the required documents, you’ll need to organize them. One helpful way to organize the papers is to separate into three piles: income, expenses and deductions, and investments. Your income folder should include any paperwork documenting your earnings, such as 1099s or W2s. The expenses and deductions can include utility bills, business expenses and other spending that you plan to deduct. The investment folder should include statements from your investment accounts and other forms documenting your investments.
You can create individual folders for the three. It’s most efficient to start these forms early in the year and keep them updated regularly. Then when it comes down to filing taxes, you’ve already done much of the work.
Calculating and filling out the paperwork
Once you’ve gathered the required documents and organized them, it’s on to the actual tax forms. Those with more complex accounting such as business owners can consider getting a printing calculator. These calculators come with many functions such as currency conversion, tax calculation, double check function and more. Business owners will find functions such as selling price or profit margin calculations extra helpful.
Scan and store records
After each tax season, you’ll want to hold onto your receipts and tax returns for at least six years. The IRS can audit you up to six years out. If you don’t want to hold on to physical receipts (and who does?), the IRS allows taxpayers to scan receipts and store them electronically. To scan receipts, returns and other paper documents, an all-in-one printer is again a useful tool to get organized. The PIXMA TR7520 allows you to print or scan from your favorite mobile device.