Tax tips for an organization are usually focused on either business taxes or personal taxes. However, taxes sometimes overlap, as is the case with a sole proprietorship or when you are self-employed with a home office. When you are looking for tips to keep organized, you may not find a whole lot of help in tips designated for just business or just personal taxes. The following tax tips are just for people like you:
Accordion Files
Accordion files are an excellent option for those that operate their own business out of their homes or those that have an office but no employees. Keep one file for all tax documents for your business and personal taxes. The front pockets of the accordion file should be personal documents and the back pockets should be for business. For expenses and documents that overlap both personal and business taxes, a single pocket in the middle of the file is designated for this purpose. Keep two to four accordion files on a single year, depending on how full they get quarterly or semi-annually.
Label the Accordion Files for Month/Year
As you go along, you will accumulate several accordion files this way. Many of them will have to be stored since the IRS may audit you and you need the last ten years of tax documents to prove the year in question. Hence, it becomes very important that you label the front of the files with a permanent marker. Write the months and year contained in each folder. File all folders in storage after you have filed the taxes for that year.
Give the Accordion Files to Your Tax Preparation Professional
Keeping things organized in this manner will allow you to just hand the accordion files to your tax prep agent when tax season rolls around. This makes the whole process easier for both you and your tax prep agent. You can drop the files off and go about your day. The tax agent receives a cohesive set of files to work through and prepare your taxes. All you have to do is pick your files up and sign the tax forms when the agent has finished.
If You Give up Your Business or Quit Self-Employment
Should you give up your business on or before the first of any tax year, you still have to have your documents for the previous year in order to file taxes. The next tax season, you will only need to keep one accordion file on your personal taxes, and only if you plan to itemize.
Contact a tax preparation service for more information and assistance.
