It is that time of year when many of us are gathering our information (personal/business) for the annual visit to our tax preparer. While the cost of everything else seems to be on the increase, you may wonder how you can save money on your tax return preparation and not waste your tax preparer’s valuable (and expensive) time?
I recently networked at a NYSIA (New York Society of Independent Accountants) seminar. I had the opportunity to ask a handful of accountants what recommendations they would make to current or prospective clients about their tax preparation. One simple answer − don’t bring your shoebox, manila envelope, shopping bag, Christmas stocking (don’t laugh, I’ve seen it), etc. filled with receipts to the office; we simply don’t have the time to sort through all that paper.
Whether your accountant has to sort through your receipts or has someone else in his/her office that does this, it can add to your bill. What your accountant wants to see is an organized list of expense category totals (office expenses, auto expenses, insurance, etc). This can be accomplished in a few ways.
Which option you choose will probably depend on the volume of your receipts/transactions and your abilities with a computer. If the volume of your transactions is very small and/or you are not comfortable with the below-mentioned software, you can simply prepare an expense summary sheet by hand with a calculator and piece of paper.
If you have a larger volume of receipts/transactions and are comfortable with any spreadsheet program (such as Microsoft Excel), you can put together your information using this format. With this method you get the benefit of the computer calculating totals and the ability to easily make changes or add additional information. You can print or email this report to your tax preparer. You may also find that once you create this spreadsheet, you can use it like a “template” and just update it each year.
Lastly, if you have a large receipt/transaction volume, you may benefit from entering your financial information into an accounting program such as Quickbooks, Quicken, Microsoft Office Accounting Express, etc. This option will provide you with a system that you can continue to use for many years. You will be ready to provide information to your accountant as often as necessary e.g. (monthly, quarterly, annually). These programs can be relatively inexpensive. An added benefit to choosing this route is that many of these programs can be linked to your bank and credit card accounts so your transactions will be automatically downloaded. If you are not comfortable in setting up a computerized accounting system, you can hire someone to get you up and running. They can then teach you to keep the system going or you can continue to use their services on a weekly, monthly or quarterly basis to continue your data input. In addition to being prepared to meet with your tax preparer, now is the best time to start a new system for 2010. Next tax season is only a year away!
JoAnn Burns is the President of J. Burns Bookkeeping, Inc. in Elmsford and can be reached at (914) 909-1575. firstname.lastname@example.org