Tying Up Loose Ends
Updated: Mar 9, 2022
Ugg, it's almost the end of the year, and you know what that means? Tax season will be upon us soon enough. So, in the spirit of preparing you better for next year, I thought I would share some tips with you to help you get ready for next year!
The first thing I do is I buy a big giant 3 ring binder. I typically order mine off of Amazon. By the way, I don't have any affiliate links, this is just good advice.
The next thing I do is get some dividers. I got mine from the Target Spot Section. You can use any kind you like.
The final things I purchase are these 3 ring poly zipper pouches. Get as many as you will need for different things:
Business Receipts (if you run your own business)
Teaching (if you're a teacher)
When you start to accumulate receipts, put them in the correct zipper pouch to deal with "later" When I say later, I just mean when your bank statement comes in!
I have some monthly sheets I use to keep track of things. One is for medical, another business, another teaching, etc. etc. I print one for each important section for the taxes.
Next thing you need to do is write down bills that are monthly and put them on the correct monthly sheet. These bills might be auto pay, and ones that you won't think of when you are doing the taxes at the end of the year. It might be a medical bill you're paying over time, or even something else. Because I have a "crafting" business and no storage in my house, we rent a storage unit every month. It's on autopay, and had I not written it down, we might have forgotten all about it!
One of the sections I have is for all of my EOB's from my insurance company. This is how I once caught a doctor's office trying to charge me $2,000 for a bill I DID NOT owe! When the EOB comes in, I hole punch it and put it in date order. If I had a co-pay for that appointment, I match it up to the EOB and staple it. I also take note if I should have a remaining balance, and if I should be looking for a bill. The other thing I note is what bank card or credit card I used. When (or if) a bill comes for that EOB, I pay it, or set up a payment plan, note the bank card or credit card used, print a receipt, or take note of the confirmation number. At the end of the month, I take my bank and credit card statements and reconcile everything. I also use a monthly sheet so I know what I paid monthly.
I do the same thing for my business. I break it down for equipment, materials and supplies, meetings, and payments. Once again I staple receipts to bank statements and credit card statements and reconcile everything.
If I had to write a check for anything that would remotely be used for taxes, I make a copy of it and write notes of what it was for in more detail. If I receive a check for anything I can use for my taxes, I deposit it (electronically since my bank is a virtual one), save the check, and file in the appropriate area. Once I make sure the check is cleared, I stamp it with a void stamp and note what it was for. If it is from a customer invoice, I print a copy of the invoice, and I file it to be reconciled at the end of the month as income. Is this extra work? Yes! But it sure looks good if you get audited! You can say you dotted your i's and crossed your t's. Oh, and I have my yiayia (grandmother) to thank for teaching me all about this when I was 10 and helping with the family business.
Everything literally has a place, and this system will save you a ton of heartache once all your W-2's come in. As I type this, I wonder if I will get one from Wal-Mart, Target, Wegmans, Harris Teeter, Five Below, and any other place I used self-checkout! Haha! One could only dream.
Let me know what you think of this system. It's been keeping us organized and my husband is less stressed when it comes to getting the taxes done.