My Tax Prep Tips for 2012

January isn’t just about new beginnings, new resolutions, and new visions. It’s also about wrapping up the year we just completed. At least, that’s where my head has been for the last few days — tying up loose ends and putting the books in order for 2011. Yes, that means accounting and tax records. It’s a task that no one looks forward to — boring at best, and a total headache if you weren’t diligent about your record keeping throughout the year.

I’m sharing my personal to-do list in the hopes that it helps you get your paperwork in order.
• print out and collect all receipts
• download reports from financial resources (bank, PayPal, expensify, etc.)
• complete ledgers for December 2011 (and any other months that are not complete)
• collect all necessary W-9’s from contractors
• issue 1099’s for all contractors
• create a summary of revenue and expenses

It sounds so straightforward, doesn’t it? Please note that I’m no accountant but mine has spent lots of time reminding me of the following:
• free products/gifts above a certain dollar value must be declared as income

As far as expenses go, don’t forget:
• you can expense a percentage of your mortgage or rent only if you have a dedicated space in which you work
• you can also expense a percentage of your utilities, internet service, and second (cell) phone
• health insurance, assuming you have independent health insurance
• equipment (printers, computers, cameras)
• subscriptions, membership dues, conference fees
• hosting fees, domain registrations, software
• don’t forget to expense mileage and gas

I know what I’m going to be doing for the next week! … and learning from my mistakes, add “create a better bookkeeping system” to my New Year’s Resolutions.

photo credit: stock xchng

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Article Posted 4 years Ago
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