How to Prepare for Filing Taxes in 2021
April 15, 2021
By Serah Blackstone-Fredericks with Books in Harmony
We all have things that we simply do not want to do. For me, it is cleaning my trunk. I really don’t like to clean my trunk. But what happens when we put something important off?
Does it wear on your energy, depleting your motivation to even try?
Does it become more obtrusive in our minds and give us analysis paralysis?
Does it become expensive?
Here are my three tips for filing your taxes and staying organized:
Create a simple system. It can be keeping everything in a manila envelope, it can be scanning everything into Google Drive, it can be keeping a folder in your email. Whatever you do, stick to it.
Set a date every month where you will sit down and organize your documents. Life gets busy and sometimes we miss a month or two of filing. Don’t let it pile up until the month prior.
Incentivize yourself. Yes, I said it. Just like we occasionally bribe our children with ice cream and the dog with treats, you are allowed to decide on something wonderful you will treat yourself to once you get this done. I suggest donuts.
Growth can be great but sometimes, there are growing pains in owning a small business. You have more revenue, more expenses, and more responsibility. Maybe you are thinking about hiring your first assistant, or you are looking to expand your team. Wherever you are in your process, know you can always ask for help.
Doing it yourself can work only if you will actually do the work. If you put it off and receive a penalty letter after penalty letter (or you don’t even open the letters), then maybe you need help. Being open to asking for help can be hard, but a good bookkeeper can make your life easier and save you money.
Here are three questions you need to ask yourself when you prepare to do your 2021 taxes:
When you get to it does it take much less time than expected or more? If it takes you 3 hours or less, then I recommend you continue to do it. If you reach hour 5 or 6 and don’t see the end in sight, you may need some support.
How much do I earn? If you earn over $200,000 per year, you should probably have the assistance of a bookkeeper.
Am I missing any donations? Don’t forget to include those!
You have been given an extra month to get this done! You can do this, and if you find yourself needing help, reach out to a professional for support.