On Prepping for the Tax Man

I know, I know, I said it. And it’s only January. What the heck am I thinking? I mean, there’s almost 3 entire months until we have to file our taxes – why on earth would I bring up such a thing?


Because I hate them, that’s why. And the better-prepped I am NOW, the less stressed out I’ll be LATER. (This is my philosophy on most things, in case you didn’t notice before!)

So, in the spirit of being prepared, or ahead of the game, even, here are 10 things I do during the year to prep for tax time!

1. Save receipts

We itemize. So all year long, I’m saving receipts. Some I can’t do anything with, but most of them are saved! And yes, sometimes it’s a pain, but in the end I’m always glad that I’ve done it!

2. Sort receipts

Once I have a receipt, I have to place it in the proper category for itemization. I have a collection of jars for that purpose, as well as a collection of highlighters. Yep, this is a pain too, but still better to do it as they come than have to do all of them at once!

3. Maintain good files

As invoices and bills come in throughout the year, make sure you have a good filing system set in place. That way, at the last minute, you’re not searching for your cell phone records to deduct those costs from your small business. You already know right where they are.

4. Track mileage

I’ve done this in multiple ways. This past year, I tracked my deductible mileage by snapping “leaving” and “arriving” photos of my odometer with my cell phone, and transferred them into my business records at a later time. I’ve also kept a pocket planner in the car, and on the date I traveled, I marked it in the planner. I’ve employed a voice recorder system, as well.

5. Scan unnecessary papers into digital form

I HATE towards the end of the year when my filing cabinet starts to get a bit full and it’s harder to place additional paperwork where it belongs. So, I scan papers onto a jump drive. It’s organized into files and folders and cross-referenced and color-coded – that way, I can type one simple word into the search bar and it pulls up the exact document I’m looking for. Works like a dream and you get rid of all that nasty paper!

6. Back up files

Make sure that all your important documents are backed up – whether they’re on a CD as well as a jump drive, or you store them in a cloud or on a dedicated or backup server. BACK EVERYTHING UP. I cannot stress this enough!

7. Communicate with other household inhabitants

This may sound odd, but here’s an example: did you know that if you hold a student loan for one of your children in your own name, YOU can write that off on your taxes? That’s a good conversation to have!

8. Know an expert in the field

All of our tax information gets turned over to my cousin, who used to work for H&R Block and knows lots of experts in the tax arena. When she gets our information, she does everything she can, and then has someone even more experienced look it over. If I ever have any tax questions, or if I want to become an enrolled agent myself, I know just who to call.

9. Have everything else completed when the W2’s arrive

Your employer has until the end of January before they have to give you your W2, and it’s much easier if all of your other tax items are already together! Then you’re good to go, as soon as you get that W2!

10. File BEFORE the deadline

I mean, whether you’re getting a refund (which I hope you are!) or having to pay in (which we did last year, and that was NOT fun) would’t you rather go ahead and get it over with? Instead of waiting until the last minute, stressing yourself out and wondering what was going to happen?

I hope these help! What is YOUR best tax tip?

92 thoughts on “On Prepping for the Tax Man

  1. For the first year ever I am actually pretty well prepared-it was something I promised myself last year when I was going crazy entering into Quicken–I am a bookkeeper so I do know what I am supposed to do-I also do my own taxes-Your list is great and maybe I will print it out and scotch tape it to my wall right in front of my computer-my filing stills leaves a bit to be desired!!

  2. Great list. My taxes are a nightmare this year because it’s my first year as a business owner. Inventory and business expenses and advertising fees, OH MY! I’m terrified. Luckily my dad is going to hold my hand through through the process. The good news, if I can get through this tax return, it will be a whole lot easier next time!

  3. Hi Kristen! I need to do a better job on the mileage part. It’s something that I just don’t think about during the year, and I need to look at exactly what mileage trips that can be counted. I can certainly start this year. All the other tips you provided are great as well. Thanks!

  4. I’m covering my ears and singing “lalalala” all the way back to my own blog. This is great information, but I can’t begin to think about taxes yet! I’ll be back in a few months to see what I *should* have done!

  5. These are all great tips. I dread doing taxes every year, even though we usually get a refund. It’s just such a tedious task! I agree, being organized is a huge stress-buster and time saver.

  6. Don’t do them…go to jail…and then you don’t have to worry about them until you get out again! Wait, no…that’s not it. I am also a get-it-done-early girl. I would rather pay more in and get a refund, than worry about how much I am going to owe. The refund is kind of a little savings account for me. I too have already been thinking about taxes and wondering if Rory needs to file her own now that she has started collecting SSI. I HATE worrying about taxes. Thanks for these great tips! 🙂

    Life With Lorelai

  7. I am right there with you I have all of my receipts sorted. The bank statements have been examined and charges that are tax-related are now entered to a spreadsheet. When I pay the bills, I already know which items are related to taxes so they are filed at that point. Right now, I am just waiting for 1099s and other annual statements. I will efile on 1/31/14. Get ‘er done!

  8. Thanks for sharing your tips. We don’t itemize, but if we ever do your advice will come in handy. Sometimes it is better to get someone experienced to handle such important matters to make sure it’s done right. Hope you’re having a great day. God bless! 🙂

  9. Luckily, my husband takes are of our taxes so I never have to worry about tax season. He actually filed them himself last year. The year before that the tax company messed up on his taxes and because of this he was almost out 3,000 dollars!

  10. I might be weird, but I really like doing my taxes. My husband is a CPA and I do the bulk of our taxes still. I think it is the challenge of seeing how much we can get back even though we try to pay as little as possible through the year by filing a big deduction on our w-4. Being organized is key. I try, but it is always a challenge. Thanks for the great tips!

  11. Thank you for the tips! To Amber @ Tales of Domestica, you’re not weird, I like doing mine too! I get money back, lol. Anything that gives me money is a good thing! Of course, if I ever get to the point where I owe, I may change my mind.

  12. We used H&R to do our tax but even though we still required to do our responsibilities to get the right refund. Thanks for the tips, those are very helpful.

  13. Good list Kristen! We have had to keep up with tax info for a long time since we have owned a business for so many years. It is always my least favorite time of the year, always wait until the deadline to file. LoL

  14. I’m really not looking forward of doing my taxes this year. No matter how “prepped” i get mentally lol I guess I will have to get to looking for those receipts some time soon *Le Sigh*

  15. Sounds like you are very much organized i hate the piles and piles of receipts we collect and then most places you also have to ask for the VAT receipt else it will be no use to you and they do not always just give you the correct one its a pain in the u know what lol.

  16. I don’t save every receipt just medical ones and cell bills…those go in to a large envelope. I don’t stress about it, I like doing them. I guess that’s when those accounting college classes kick back in, I like entering numbers! I haven’t owned a business for a few years and that does make the process so much easier! Sounds like you have it all under control…as usual. 😉

  17. Taxes used to be not so hard, I mean we had it down.. save home repairs, improvements, records, donations.. meaning toss it all in my husbands desk and he put it in the appropriate file. This year we found out we inherited half a company (shared between 3) on 12/31 and inherited the other half on 1/1. We have to file ‘corporate’ taxes as a family ??? I am so confused and unprepared. The company has great records, but for the first time ever we will need to file an extension and with two other families… We didn’t know about any of this until the final hours of 2013! We will be paying lots of accountant fees I’m sure .. Well, what fun would life be if we weren’t learning from crazy thrown at us experiences, right?

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