Why do we put off doing our tax returns?

It´s April 29, two weeks after the final due date for the 2013 tax returns for certain taxpayer. Yesterday, I was scurrying about getting many tax returns to the IRS for our clients who haven´t been able to provide us with their tax information earlier.

So I started wondering – Why do so many people wait until the last minute to get the tax return information to their preparers? I have experienced the same franctic rush a few times a year: April, June, September and October. How could we reduce the stress we feel each year when we scramble to get our tax return info together for our CPA´s?

The key DOCUMENTATION. The problem is that most people do not have a good system for maintaining the documentation for their tax returns. It´s bad enough that we have to deal with taxes, but add in bookkeeping and logs and receipts. It´s no wonder so many people put off doing their taxes.

So here are a few hints to simple documentation and making life easier for tax time.

1. You can hire a bookkeeper: You can find the some qualified professional on elance.
2. Get a receipt system:
Digital: My favorite smart phone applications are Proximiant and shoeboxed.
Analog: Buy a bunch of manilla folders. Download our ClarionPack under the ¨Business Income¨ TAB. At the top of each folder, write one of the expense categories from the ClarionPack Info Request ¨Business Income¨ TAB. Then, as you have receipts for deductible items, put them in the appropriate manilla folder. When tax time comes, simple add up all of the receipts in each category and give the totals to your CPA (they don’t really need the receipts and it will save you considerable professional fees if you do the addition yourself).
3. Set a date when you will get all of your tax information to your CPA preferably on a monthly or quarterly basis. Even if you want to extend your tax return, get your information in early and then simply as your CPA to file an extension.
Don’t let tax return time stress you out. Get your documentation done early and get it to your Tax Coach early so you can get your return done in plenty of time for the deadlines.
Best regards,

Chaz