It is that time of year, tax time! Time to gather all your information and put it together for taxes. Since I run a business, am self-employed as is my husband, we have a return that is a bit complicated.
I think I keep good records. I pride myself on my organizational skills. I know my sales and losses daily and monthly by checking a spreadsheet I developed. I can compare sales and costs to the prior 3 years at a glance! Yet….
Going through all the paperwork involved with tax preparing my accountant asked after 90 minutes about a $247.00 claim. My answer at first glance was it was for ‘This and That”.
Evidently ‘This and That’ is not an appropriate answer for a claim to an accountant!
It was advertising, sort of and charitable contribution, sort of. Basically it was for expenses that didn’t fit under any one heading. In hind sight I should have put it in advertising or charitable contribution, not miscellaneous, but……
So here are a few tips I have learned over the years in tax preparation:
- Never explain an expense as ‘This or That’. There is no deductible column for it.
- Never talk about lost receipts. If they are not presented at the time of your appointment, they don’t exist.
- Write on receipts what the receipt is for.
- Write legibly.
- Get receipts for everything possible and be sure to date them and or fill them out if it is a generic receipt like given by the Good Will.
- Have all your 10### forms ready and filled out.
- Never Ever talk about any money you received that you are not claiming, even if it is just a few bucks!
- Be sure you have paid your taxes from the prior year or be prepared to explain why not.
- Don’t even try to explain some breech in payments; this is why you are paying a CPA!
- Grow a thick skin. I know my accountant will be chuckling to his accountant friends about his client who tried to explain an expense as “This and That”!
Do you have some tax tips to share???