Are you self employed?
Do you have a pile of receipts on every corner of your desk, in every pocket or purse?
Have you ever wondered how to organize your receipts for taxes.
There is no time like the present to get a solid system in place. This system will save you hundreds of dollars in bookkeeping fees, hundreds of dollars in professional organizing fees and will save you loads of stress at tax time.
Below are my 5 simple steps to creating a receipt filing system to get you completely prepared (early!) for tax season!
Tip #1: Get yourself a basic accordion file box.
I have used the same one for almost 3 decades. It is called “canceled check file”. Make labels of the appropriate tax deductions for your business.
Some common ones are:
- Entertainment (taking clients out for coffee or a meal)
- Car expenses (includes fuel, repairs, insurance)
- Parking
- Supplies (pens, paper, envelopes and so on)
- Phone (including mobile devices)
- Rent or Mortgage Costs
- You may have other expenses. These are only a few of the main ones.
The key is to file all your receipts every other day or at least at the end of each week. I file mine while I have my phone headset on, taking to a friend or family member. Yes I can do both tasks when it comes to this one.
Tip #2: Your next step is to add up all of your receipts. It is best if this is done at the end of each month. This is where people get themselves into trouble. They leave it for months or even years on end then the task becomes overwhelming.
Take all your entertainment receipts, add them up, and staple them together with the total on the front. Do this for each file you have set up.
Tip #3: Send all your collated receipts to your bookkeeper. They will then do all the data input and have spreadsheets ready for your account. I send 3 months worth at a time to my bookkeeper.
If you are totally electronic you can do this step yourself and simply input your receipts in the computer program you are using. Even basic computer programs like Excel will do all the totals for you.
Tip #4: Once a year, yes that is right once a year, pay a visit to your accountant and get your taxes filed on time. One of the most common items I come across while conducting hands-on organizing is overdue tax returns. The tax department does not like it when people do not file their tax returns. There are huge fines involved and BIG red flags go in front of your name.
Tip #5: Store all receipts and tax returns in an out of reach area. (Check out my video on crawl spaces for some tips, click here.) I like to put them in a plastic container so they do not get dusty, wet or moldy. The requirement in most countries is to keep your past records for 7 years. Once you put in a new year take out the oldest year and shred it. If you are applying for a mortgage you might be asked to show your last 3 years of tax returns. This is another great reason to be organized.
How would you like a FREE downloadable List of labels of all the appropriate tax deductions for your business? Please contact me and we will set up a complimentary no-obligation 30-minute phone call on how to move forward with your dreams, goals and resolutions. If you arrange your FREE call with me, I will send this FREE list to you so you can get on the right path to organization.
Here’s to your success!
Rowena@gettingittogether.ca
604-520-9550
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