With tax season upon us, it is easy to feel overwhelmed and unsure of where to start. The daunting idea of an IRS audit is enough to send any sane person into a frenzy. But it doesn’t have to be this way! With the proper preparation and hopefully a years worth of detailed records, tax season can be a breeze. Adopt some of these habits, and set yourself up for a successful tax season year after year!
Keep Everything
When you run any kind of business, much less one that involves investing, keeping detailed records is absolutely vital. Every receipt, every email confirmation of payment, everything. Keep it all. And do yourself a favor and don’t keep it all tossed in an old shoebox. Invest in a filing system to keep things organized either by month, like transactions, etc. Keep it all and let your tax professional decide if it is necessary or not.
Make a List
Make and keep a running list of all of your tax documents. This includes 1099, W2, W9, and 1040. Also make sure that you have access to your tax documents from last year. Being able to hand all of these documents to your CPA will lessen the headache. There are detailed lists of what your accountant may or may not need when it comes to documents and records.
Keep Detailed Income & Expense Reports
If you’re looking to maximize your deductions, having a detailed report of your income and expenses is vital. If you want to get a mileage deduction, you need detailed records. If you had any business expenses including meals, transportation, lodging, electronics, etc, then you will need to have receipts and records for all of this in order for it to be accounted for on your taxes. There are wonderful apps to help you calculate your mileage and they make it incredibly simple to keep track of which driving trips were for business vs. personal reasons.
Hire a CPA!
Tax accounting can be complicated and the more properties that you own, the more investments that you have, the more there is to take into consideration. So when it comes down to it, we always suggest that you hire a professional! In the same way that we hope you will always work with professional investment companies, we think that having the best in the business makes you the best in your business. If you don’t personally know an accountant, we suggest that you ask around, find someone who is familiar with your business who can get you the most deductions and answer all of your questions. Someone who is well versed can relieve a huge amount of stress!
When you’re done with tax season and you’re ready to start doing some more investing, let us know! With the new year, we are working on all kinds of new projects and we would love to see how you could fit in to our investing journey. For more information on investment opportunities, head to our contact page and leave your information so that we can reach out!
