It’s tax season again – and for me, it’s way more of a hassle this year than it should be. Even between having a regular day job, managing a non-profit, and owning my own business, it should all still be fairly easy since I have an accountant, right? He can figure everything out easily enough on his own, right?
Wrong and wrong!
Last summer I had a horrible experience when my computer AND my external harddrive both crashed within a week of each other (I know, I know, #firstworldproblems). I lost everything, including my meticulous Excel spreadsheets of income and expenses. And I never bothered to pick up where I’d left off since I was so devastated at the time (*smacks forehead*). This has resulted in me handing a pile of papers to my (super awesome) accountant this tax season, and him having to send me a good half a dozen emails asking a bunch of questions since I did NOT provide all of the information that I should have had (really obvious stuff too. It’s kind of embarrassing the number of things he’s had to request, to be honest). This can create a whole lot of unnecessary stress and can take a toll on our mental health.
So next year, I’m going to make tax time for myself (and for you!*) a breeze. All I (and you!*) have to do is the following:
- Track all of your income and expenses every month in Excel spreadsheets. Include the date, place, what you bought, how you paid, the amount you paid, and a separate column marking if you need to include GST separately if you have your own tiny freelance business.**
- Colour code! Have separate colours for business expenses and for regular bills such as hydro and your mortgage.
- At the end of every month, tally up your complete expenses and income for that month. This is mostly just interesting because you can see just how much you REALLY spend every month (and it’s likely going to be quite the shocker).
- At the end of THIS tax season, create a document listing EVERYTHING that you had to give your accountant, including all of the info that he had to ask for in the 6 – 12 emails he sent you. This way, next year, you’ll be able to have all of that information ready for him and you can save both of you a lot of time!
- Send a thank you note to your accountant, since he’s a pretty cool guy.
- Back up your spreadsheets and tax season document in four different places so that you never have to worry about losing it again.
How do you prefer for the madness of tax season? What tools do you use to make it easy peasy? Share in the comments section below!
*Assuming you also have this problem. Is it just me or do some of you scramble at this time of year too? Please tell me I’m not alone in this!
**I expect that most people who have their own business and GST number will be using some kind of fantastic accounting software since that would really make the most sense, but when you’re a really tiny business like me, getting Quickbooks seems a little unnecessary.