Many of us make resolutions as part of our New Year routine. We may resolve to exercise more, to lose weight, to get organized, to stop procrastinating. Well, I am going to discuss getting organized to make your tax life easier and, perhaps, a little less stressful.
You can find any number of methods for organizing your paperwork. I am not going to cover that aspect other than to suggest you find a method that works for you and stick to it. I have different recommendation for helping you get organized.
Making a calendar or list makes our finances easier to manage
You can reduce your stress and enhance your record-keeping, and maybe even manage your cash flow better, by creating a calendar of financial events for the coming year. You can do this either by making a list or actually putting the information on a calendar – use whichever method works best for you. We all “know” these events are coming – we have them in our head. But sometimes creating the list and having it available to see gives us a better visual image and make it easier for us to manage.
Be specific and detailed
When you create the calendar, be very specific and detailed. List the date, the event, and the amount due. You can even list the payee.
Don’t forget to list those expense (or income) items that happen only quarterly or twice a year or even annually. With those items listed, you won’t be “surprised” when the time comes to pay them.
For those of you who have employees, you know you need to make payroll tax deposits at least monthly, maybe more frequently depending on the payroll taxes you paid during a specific period in the past.
For those of you who are self-employed, you know you need to make estimated tax deposits. I strongly recommend you make deposits (both federal and state) at least monthly. That way the payments are smaller and you get the money out of your account so you are not tempted to spend it on other expenses. For those who receive income on an irregular basis, such as realtors, I recommend making the tax deposit as soon as you receive the money – do not wait.
Creating and using a calendar of financial events can help us manage our cash flow and may even reduce our stress level. Happy Planning!