Affiliate links for the products on this page are from partners that compensate us (see our advertiser disclosure with our list of partners for more details). However, our opinions are our own. See how we rate tax products to write unbiased product reviews.
- I'm a financial planner, but I've still learned a lot about managing my money from my accountant.
- He taught me how to treat bookkeeping like a part-time job, and how to think about the tax implications of my business decisions to get the most out of tax credits.
- You can apply these lessons this year (since the tax deadline has been pushed back to July 15) or start planning now for your 2020 taxes.
- See Business Insider's picks for the best tax software »
NEW LOOK
Sign up to get the inside scoop on today’s biggest stories in markets, tech, and business — delivered daily. Read preview
Thanks for signing up!
Access your favorite topics in a personalized feed while you're on the go.
Since the tax filing deadline has been pushed back to July 15 this year due to the impact of COVID-19, plenty of us are still working on filing our taxes for the 2019 tax year.
Tax preparation is always an arduous task, but this year feels more stressful due to economic conditions, the impacts of the coronavirus on the job market, and the potential for owing money at a time when most people don't have extra to spare.
I've been working with a Certified Public Accountant (CPA) for 16 years — through business transitions and the birth of my four kids — and I've learned many valuable lessons over the years about navigating tax issues.
Some of these tips can help make the process less stressful for this year's return, while others can be implemented now to make next year's Tax Day easier to stomach.
Treat bookkeeping like a part-time job
The most important tip for filing taxes I have ever received was the advice to be hyper vigilant about bookkeeping. I am not a very organized person at all, so my CPA suggested early on that I should treat bookkeeping as a part-time job if I wanted to avoid a nightmare come tax time.
With the help of my CPA, I created an easy system to keep track of all my expenses with the goal of simplifying the tax-filing process. Fortunately, this system has worked well for me as my family and businesses have grown. With such a strong foundation in place, it was easy to make adjustments when needed.
In terms of the system I use to stay on course for the year, it mostly involves keeping track of receipts, invoices, and all other tax-related paperwork in a methodical manner.
For example, since we have multiple businesses, we opened up credit cards for each of them. Being able to pull the credit card statements any time and sync them to QuickBooks has saved us hours.
The receipt for anything that wasn't purchased on a card is placed into a monthly file folder for easy filing. I know where all the paperwork goes when I receive it, and I no longer let it pile up.
By keeping track of all the paperwork for our taxes on a daily basis throughout the year, I never lose important documents and I don't miss out on related tax deductions as a result.
Think forward instead of backward
A meeting with any tax professional is usually focused on the year prior, but our CPA taught us that we should be looking towards the next tax-filing season at all times.
My wife and I would often joke about this — we'd try to think from our CPA's perspective about any new venture and what we would need to provide or document to make our next tax meeting more efficient. The joke was on us, though. Thinking this way helped us plan accordingly in terms of the appropriate tax breaks and credits we might be able to qualify for.
Looking forward became especially helpful with my business when I started working predominantly out of my home. By looking ahead, we were able to structure our house plans to make sure that we got the proper deductions for my home office.
The bottom line
As you prepare to complete your taxes this year, I want to give you one final piece of advice. Consider working with a tax professional like a CPA — particularly if you have a complicated tax situation.
While you can do your taxes yourself using a tax software program, expert advice can help you qualify for credits and deductions you don't even know about, and this could lead to significant tax savings over time.
At the very least, a CPA can answer your questions and leave you in a position where you know for sure your tax return was completed the right way. Working with a CPA isn't free, but the peace of mind you get can be priceless.
- More tax day coverage:
- When are taxes due?
- How to file taxes for 2019
- Should I do my own taxes?
- Credit Karma vs. TurboTax
- Where is my tax refund?
Jeff Rose is an entrepreneur disguised as a certified financial planner, author and blogger. Jeff is an Iraqi combat veteran having served in the Army National Guard for nine years, including a 17-month deployment to Iraq in 2005. He's best known for his award-winning blogGoodFinancialCents.com and book, "Soldier of Finance: Take Charge of Your Money and Invest in Your Future."He's also the founder of Wealth Hacker Labs, a movement to teach accelerated wealth-building strategies to future generations. He currently writes for US News & World Report, Forbes, Entrepreneur and has been featured in major sites such as The Wall Street Journal, CNBC, Reuters, and Fox Business.
