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It’s approaching April 15th & a voice in your head says, You need to do the taxes. You are up late one night trying to find all the receipts, trying to remember the information you’ll need, & searching for your stuff from the previous year. The voice is now saying I’ve to do this differently next year. Wouldn’t it be great if all of your tax related items were collected & grouped throughout the year, so all you have to do is punch in some numbers or hand over all the information to your tax preparer?

Each business is different, but there’re some simple steps you can take to make the year-end process go smoothly. The key is to setup a simple system for collecting the information throughout the year. Keeping information in one place & doing data-entry over time will dramatically reduce your time spent & stress level as tax time approaches.

Designing the System
Think about your existing system. What has worked & what has not? Which aspect would you like to get a better handle on for next year? Define a system to manage receipts & income/expense transactions.

• Collect receipts in standard sized envelopes at the front of your desk drawer. Label the envelopes ‘home’, ‘business’, & ‘taxes’. Empty the receipts from your wallet directly into these envelopes. ‘Taxes’ is a catch all for random receipts (i.e. donations, medical visits). Alternatively, carry envelopes in your purse or car & merge them with the envelopes in your desk at the end of the week.
• If you shop at the same stores for home & business, write ‘home’ or ‘business’ on the top of the receipt while paying at the store.
• Flag transactions in your check register ® that you’ll need for your taxes by putting a note to the right of an entry indicating the category.
• Add a file to your filing cabinet called ‘Taxes’. Use it as a catch all for miscellaneous items you receive during the year (i.e. donation receipts & thank you letters).
• Mark tax-related transactions on your credit card or bank statements with highlighters. Create a legend to keep in your ‘Taxes’ folder for use each year (i.e. Yellow=medical, Pink=car, Green=supplies expense). Remember to download credit card & bank statements monthly or quarterly, since some companies do not keep the records very long.
• Use a spreadsheet & enter the information throughout the year. Create tabs that emulate the tax forms (i.e. ‘Schedule C Business Expenses’, ‘Form 8829 Business Use of Home’, ‘Schedule A ? Donations’). Use the spreadsheet to keep track of your expenses, income, mileage, travel expenses, & other tax information completely unique to your business.
• Keep tax information from prior years together in a box or a secondary filing cabinet. Thin your file drawer by removing statements you want to keep. Place them with a copy of your tax return & any supporting documents into an envelope or file folder. The large FedEx envelopes are useful for complex tax returns.

Elements of this system will be very useful for most businesses. Evaluate it, implement the pieces that you like, & modify it to fit you… Re-evaluate your system at tax time. Make changes while they’re fresh in your mind. Fine tune your system each year. With time, the voice will say ‘wow, taxes were a breeze this year’.

Colette Lamm is a Space Planning Specialist & Professional Organizer from the San Francisco Bay Area. Working both in the residential & business environments, her specialty is space efficiency & process improvement. To contact Colette, email info@AboutSpaceOrganizing.com For articles, resources, & tips, visit http://www.AboutSpaceOrganizing.com & http://organizingguide.blogspot.com

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