Taxes, Here I Come!

Good Financial Hygiene Habits

A friend commented to me about my lack of stress around preparing my taxes and asked how I get mine done so quickly and seemingly easily.

To begin with, I have good bookkeeping systems. I run both Quicken and Quickbooks on my Mac. I use Quicken for my personal account and Quickbooks for my business account. Quickbooks allows invoicing. which I need for my business, and since I started with Quicken and then went to Quickbooks, for me it just made the most sense to continue keeping them separate. If you are self-employed you really should have a good program to keep track of your finances. If you only need to keep track of personal expenses, then Quicken should be plenty for you.

Juli Shulem

The next thing I did was set up my account categories so that they reflect the same ones on the tax forms I need to complete each year. It took me a while to finally figure out that trick. I am convinced it has made my bookkeeping process faster, and tax prep certainly has been faster and easier since I did that.

Probably the key to not having a huge messy project on my hands the first quarter of each year is that I keep my accounts updated and balanced. I categorize every single expense and all income as it occurs, and balance my checkbooks every month. (I am still one of those not entirely comfortable with managing all of my accounts online, so I do it offline and check online if I need more information.) One of the nicest benefits of this habit is that at the end of the year I can get my business profit and loss statement in seconds by pushing one button.

The other task I conscientiously perform is sorting all my receipts into several categories and placing them into labeled 10”x13” envelopes. I can get at anything within seconds should I need more information while preparing my tax papers. This saves lots of time and reduces frustration greatly.

Scheduling an hour or two monthly to update your records, balance your checkbook, and file all important papers relating to your finances really will pay off come tax time. My actual filing is done by a tax professional, but it’s preparing for that point in the process that takes its toll on most people. (Having good systems in place will be a huge help all year long, not just at tax time, especially if you are a busy person and numbers are not your thing.)

In a hanging file labeled “Taxes,” I have one file folder called “Current Year” and another called “Past Year.” Any receipt or piece of paper I will need for taxes goes into the “Current Year” folder. After the year is over, I move all the items collected in “Current Year” to the folder labeled “Past Year.” This of course frees up the file labeled “Current Year” for new items needing to be filed as they come in.

After all my tax filing is done and I have my returns back, I put all the receipts and support material into a file area out of my office and keep the prior two to three years of returns in my office files for reference. And now we start all over again …

I hope this helps for 2012 taxes and beyond!

Ask a question for the column and I will address it at the appropriate time. Email questions to Coach Juli at and put “question for column” in the subject line, and they will be answered right here.

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