Tax season is fast approaching—and it’s never too early to start prepping for your tax appointment. Ideally, you would have started preparing for your 2021 tax appointment at the start of that tax year. When you begin to organize your finances sooner than later, it will make filing that year’s taxes much easier.
Consider keeping a spreadsheet
Regardless as to whether you’re a self-employed freelancer or you own a small business, you likely understand the importance of tracking your expenses. Rental car expenses, flights, hotels, advertising expenses, and mileage you log on your car are examples of things you might be able to write off.
Remember- trying to reverse engineer your expenses three days before your tax appointment will be like trying to pack your home for a move in less than 24-hours. Instead, consider keeping all of your receipts and tallying them at the end of the week. If you do decide to use a spreadsheet, create tabs for what you’ve spent (in each category that you have) for each month- and update that spreadsheet cell weekly. Additionally, keep all of your receipts organized into various piles. Whereas some people prefer to use paper clips to organize receipts from various categories together, others prefer to separate them out into envelopes. Remember- the best organization system is the one that you can stick with. Not only will this help ensure you’re keeping track of all your possible deductions, it will help ensure your tax appointment goes as smoothly as possible.
Keep track of other income adjustments
Business expenses aren’t the only thing you can deduct from your taxes. You can also deduct student loan interest, retirement account / IRA contributions, educator expenses (such as supplies purchased for the classroom), health insurance premiums, certain alimony payments, certain moving expenses, and medical savings account contributions, among others.
For more information about when you should start planning for your tax appointment, or the types of documents you’ll want to start gathering in advance of meeting with your CPA, we can help. Call the office of Hughes, Snell, & Co., PA today to speak with an expert. Additionally, if you’re ready to schedule a time to meet with someone to file your 2021 taxes, we can help with that too. Call our office today to learn why we’re the #1 recommended CPA firm in all of Southwest Florida.