The Tax Man Cometh: How to Prepare?

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Share your ideas for easier tax return preparation and filing.

williamsburg thomas jefferson

photo source: Heidi

As you know, the only things sure in life as death and taxes. Whether you get a return each year after filing or have to pay something, we all pay taxes: at the store, at the gas pump, at the DMV. Somewhere.

The question of taxation and how it should be broached by national government certainly shaped the history of our country, and by consequence, the world. Taxes are important.

It’s not just a question of paying up some money, but it speaks volumes about how nations are run and how people are served. Or not.

By my calculations, the tax time is here with exactly 60 days for those of us in the US to get our returns prepared and filed.

How do you prepare for taxes?

When I was growing up, tax time was a nightmare. My dad would pull out this large drawer from his desk bursting with receipts. He and my mom would sort them all, for hours late into the night. I don’t remember it being a fun thing.

Thank the good Lord for the computer age, keeping track of expenses is so much easier now!

Since either my husband or I have been self-employed for the length of our marriage, we enlist the aid of an accountant to prepare our taxes. There are just too many variables and rules, that it’s better to let someone else know what they are and crunch all the numbers for us.

But, that doesn’t mean that I don’t have to do some work. I regularly track our expenses in Quicken. Then right about now, I go through all the reports to make sure that I’ve categorized things properly — and that someone besides me can understand what they are!

Honestly, I dread it because I’m usually a few months behind in reconciling my bank accounts, so I usually have to play catch up on that, too. (And yes, I am that.)

My guess is that you guys all have great ideas for being organized and on the ball with tax returns. I would love to hear some of you organizational tips and tricks! I remember last year around this time, I asked on Facebook, and tons of you had already completed your returns! Go you!

So, what’s your mode for being organized for tax returns that makes it easier and a little less painless?

How do YOU organize for tax time?


This is Frugal Friday. In an effort to make these weekly financial discussions more interactive, I’m no longer posting a link-up. Feel free to leave a link. But better yet, chat with us in the comments.

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  1. i wrote about my tax system here:

    basically i just install turbotax first thing and enter everything as i go. my system is very easy and works extremely well for me. i tag all my tax-related transactions throughout the year and save receipts. everything deduction related is ready to go on dec 31. when i get any form in the mail it goes into turbotax THAT NIGHT. i don’t wait. i don’t like to do it all at once. for me that leads to procrastination!

    i use a service to pay employees and do their quarterlies. i do not do one for our self-employment taxes. if i am running under a corporate structure (i have in the past for different gigs/contracts that required it) i will use a service, because it is even more a PITA. but i don’t use a preparation service.

    basically the key to my system is to do it as i go along. it’s the only way i like to do life related stuff. i’m not a project person. at all. and i totally suggest using a program that will automate your transaction categorizing. who has time to do that by hand? or the patience?

    this is a good time to remind everyone to save their returns as filed & documentation for at least 7 years. we were subjected to a mini audit once (claiming the tax credit… for our child.. that is ours… yeah..) and it took over a year to be resolved. we were happy to have everything related to that right at our fingertips! we use an accordion file to file our yearly tax related items. it doesn’t have to be pretty, either!

  2. We use an accountant to file as well. Every year I come up short with a paper of a figure he needs and have to go home and search for it for him. NOT AGAIN this year I made note of everything he asked for and I plan to type it out and laminate it and then keep it in a visible spot when I am doing our bills and remember to note and collect all the things he needs so that come tax day they are all in one place, no more….um….can I get back to you on that.

    1. That’s a great idea! I usually dig through the emails from the previous year to see what she asked for. It would be better to just make a document with the list and then put it in my tax folder at the start of each new year.

  3. My handiest tax tip, if you itemize, is to go to your pharmacy and have them print out your prescriptions for the previous year. It takes 10 minutes and saves adding up all those little copay receipts. Huge time saver. And you don’t have to worry about keeping track of the receipts all year, now you have an official printout.

  4. We already got our refund. Our family lends to Uncle Sam yearly so we look forward to tax time. I guess living in the Philippines has given me a unique perspective on our tax system. I’m more than happy to pay for roads, schools and a myriad of other things my tax dollars go towards. My heart broke to hear the stories of young girls that left school by the sixth grade to prostitute themselves to help their families. So I’m more than happy to help families in this country in hopes that the children here never need to know such horrors. Don’t get me wrong there are more than a few things I would do different if I were in charge of the budget(do we really need to spend more on defense than the next 10 countries combined) but overall I’m more than happy to pay my share(and humbly remember when we were starting out and qualified for EITC.)

    As for taxes, we just use Turbo Tax online. We could probably itemize since hubby spends a lot of time on the road for work but we’re doing well enough and are happy enough with just taking the standard and the child tax credit for our younger two. It makes things no muss, no fuss. I’d imagine your taxes are much more difficult though if your blog generates income.

    1. Being self-employed is what makes it tricky. I’ve been a freelance writer for 7 years now.

  5. My husband’s self employed amd we just use the business version of turbo tax ( not free). We keep paper trails of his travel and office expenses. It helps he has his own business bank account because he only uses that for business expenses. Keeps things separate And tidy

  6. We use an accountant. My hubby was, until the middle of this past year, a pastor. Considered self-employed for tax purposes…it’s just been worth the money and peace of mind to have someone do our taxes for us.

  7. We always file our taxes immediately once my husband’s W-2 comes in. We have already filed and as of a week ago, received both our Fed and State refunds. We are done and have money in the bank, WHOHOOO!

    Since I am a SAHM, my husband’s salary is the only W-2 we wait on to file each year. I am an accountant by trade, so we have this down. I track all expenses and income in Quicken. All receipts get put in the day after purchase, all income is put in for the whole year ahead of time since my husband gets paid a salary and is not hourly I know his set pay. Then each month, I reconcile based on all of our bank statements (we have 5 different accounts) and enter all of our bills as I pay them once per month. Other than the child credit for our son, our tax returns are very simple. We own our home outright and all of our medical is paid for with my husband’s insurance so we have never had the need to do an itemized return. Because we don’t all of our tracking of expenses and such are just for us, not really for the tax preparation.

    1. Whoops, forgot to mention we do our taxes ourselves each year. I purchase Turbotax at Sam’s Club each January and away we go!

      When I was very young and had my “1st” jobs, I used to do the paper EZ 540 returns myself. Seriously, at like 15 I would take my W-2 and fill it out and mail it in. I think I must have been destined to be an accountant all along..LOL

  8. We divide and conquer. I do our family taxes and my husband (with my help) does our business taxes. Mostly, I think having a mind for details, being very disciplined when life is super-busy (see I keep up with the numbers but have to rely on already done freezer meals in this super-busy winter season) and kind of already knowing where we’re headed helps.

  9. My favorite tax tip is simple: Track your donations! I used to just randomly donate things to Amvets, Goodwill, etc., and I never tracked it. This year I tracked $2,000 in donations of gently used children’s items to a crisis center! Awesome. 🙂

    Oh, and I keep donation receipts in a file and plug into itsdeductible periodically, then it’s ready for download in January!

    1. That is such a hard thing. Tracking the specifics certainly gets you a better deduction.

  10. Jan 1st I start a folder labeled ‘taxes (year)’ and keep it handy in our office. Through the year, any papers that might be needed for deductions at tax time are placed in this folder. Anything I write a check for that is deductible, I highlight the entry in the check register. The following January as tax papers are mailed, they go right in the folder. In February, we sit down to do taxes and everything we need is in one place. Being organized makes tax time slightly less painful.

  11. I hate it even though I worked for a tax preparer for a couple years, I hate budgeting and doing the finances….BUT as a self employed person I deal with my taxes every week when I do the finances. I balance my check book every week also and compare it to what has ran through the checking (with internet and my acct I don’t have to wait for the monthly statement)

    I found doing a little every week and putting it in the correct files (hard copy also) I don’t cringe and stress out when it’s tax time.

  12. I’m actually working on our taxes now! We just started using an accountant a few years ago. I have always done them and enjoy it (crazy, I know) but I have gotten so busy and haven’t had time to keep up with the ever changing tax laws so I have put it in the hands of a professional. I love all the tips here because I still don’t have the perfect system down – I keep folders in my desk for ‘taxes’ in general and then one for medical expenses which I toss anything I will need into as I get it and then organize everything on my ‘tax day’ – which is today.

    I am also behind on reconciling my bank account and I’m glad I’m not alone! 🙂

  13. The tip I have is for people who use a professional to do their taxes. Come into the first meeting extremely, extremely organized. The more organized you are, the less itime it will take the tax pro to prepare the tax return. The less time it takes, the less expensive your tax prep bill will be. I know this because my hubs is a CPA….

  14. If I ignore it, maybe it will go away… {sigh} Not going to happen, eh? I’m dreading our taxes this year, but it’s time to make the appointment with our blessed CPA and see if he can figure out how much they’re going to collect. This is just one of the many reasons that I’m a fan of the idea of a flat tax… 🙂