Preparing Ahead for Taxes

Preparing Ahead for Taxes

Thrifty Thinking

Today I went to our accountant to get our taxes done.  I started preparing for this day in January 2012.  I cannot emphasize to you enough how much easier tax time is if you think ahead and start documenting as you go.  This was the smoothest time I have had with our tax accountant because I was prepared for this day.  I did learn some things that I can do NOW to make next year’s time even smoother.  Today’s event inspired me to share a few tips that may help you, and maybe you can share a few tips of your own.  I am not certified to give tax advise, but I am just sharing one person to another.

Do you volunteer at a local soup kitchen or at your church? Did you know that you can deduct volunteer mileage? There are many categories that fall under this umbrella. I asked our accountant today if I could include volunteer mileage for a group I run through our church, Fellowship and Fitness, where we get together to fellowship while walking for exercise, and he said that counts! If you have something that you think may qualify, be sure to ask a qualified tax representative. I will start documenting my miles for that next week!  I’ve missed out on this the last couple of years.

We document all medical expenses because if your medical expenses are about 7.5% (ask your tax rep for the exact amount) of your income or more, you can deduct it.   This includes all mileage going back and forth between you and your medical and eye doctors, and the dentist. Keep records of any prescriptions purchased, eye glasses purchased, co-pays, doctor bills and the like. Unfortunately supplements don’t count. So I have a Google spreadsheet for medical mileage and a separate one for medical expenses that I update the day I go to the doctor or pay a medical bill.

Make sure to keep tabs on job expenses and extra mileage that isn’t included in your day to day commute. We have a manilla folder in which we put all of JSarr’s receipts for business lunch meetings, book expenses, etc…. You don’t want to give the government money that should be yours, do you? Keep track of those receipts. If you do it as you go and get in that habit, it’s a snap!

Do you have any small businesses? I personally run two businesses that I consider almost exclusively my own. That sounds weird to me because I really don’t think if myself as a small business owner, but I am. We are. I teach piano lessons, and I run this blog. So I have a separate Google spreadsheets for piano lesson mileage (like cashing checks), piano lesson income, piano lesson expenses (like piano tuning, books, concert fees), blog mileage and blog expenses (for updating prices or buying recipe or DIY project supplies), and blog income (do not blog for money unless you have a passion to share something because it can take a lot of time before you earn an significant income). So when I am in line at a store or bank, I am recording my mileage.

After preparing for today’s meeting, and since we have some home businesses, I learned for next year NOW I need to start keeping track of our water, sewer, garbage bill, gas bill, and electrical bill on separate Google spreadsheets because they were hard to resurrect this year, even with all if this Internet technology we have at our fingertips. Some companies don’t have easy-to-view past bill pays. We also need to keep detailed records of all of our car expenses, car insurance, mileage, gas bills, and maintenance on a spreadsheet for easy access.

Are you ready to do your taxes? Are they already done? Do you wait until the last minute?

**Check with the IRS each year to get the maximum benefits as the law changes every year.

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