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Wednesday, January 7, 2009

Organizing Your Tax Information

With 2009 underway, we have officially closed the books on our earnings in 2008. The only thing left to do now is gather all the information, wait for 1099s to come in the mail and procrastinate until April 15th. Hopefully, you won't be left trying to figure out what numbers to put where and trying to figure out how it is you owe so much more than you thought you were going to on tax day, and one way to decreasing the stress of taxes is to get organized.

Mandi showed us a wonderful template for keeping track of your work as we go through the year and went over the benefits of having it available to you. This is a wonderful place to start off the new year and will ensure that all your information is in order when it comes to do your taxes for 2009. If you don't have a system like that in place already, make sure you start now for next year, and don't panic. While it may be more difficult to gather your information, it isn't mission impossible.

Things to take care of in the next month:

1. Gather all your 1099s as they come in from your contracts and keep them together. It is a good idea to record the numbers in an electronic format as well so you have them to reference easily. Make sure you get a 1099 from all the necessary companies, and figure out the additional income you earned from anyone that would not be required to send you a 1099.

2. Look at your business expenses for the past year, gather receipts and make a detailed list of deductions you are able to take. The IRS site provides a complete list of what is and what is not deductible as a business expense. If you are ever in doubt as to whether something is deductible, it is always a good idea to contact a CPA to answer your question.

Getting your information together early will reduce any stress you may have over filing your taxes in April (or whenever you choose to file them), and it will also help guide whether or not you need to be filing quarterly tax payments for 2009.