What Should You Be Doing In the 4th Quarter of 2011 for Tax Time

by DenverBookkeeper

What should you be doing in the 4th Quarter of 2011 for tax time? Tax season is just around the corner and many of us are still unprepared for it. However, there is no time like the present to get things ready to avoid the rush. Here are a few handy tips to get you prepared for the March/April tax season!

What Should You Be Doing In the 4th Quarter of 2011 for Tax Time

If you are a small business owner, start thinking about the forms you need to prepare and issue in January for the 2011 tax year. These are most likely 1099’s and W2’s. 1099’s need to be issued to anyone who is not a corporation and who provided services to your business and to whom you paid $600 or more for those services….so your tax preparer, your bookkeeper, your marketing guru…there may be several folks. So, get a W9 from them NOW to have their information on hand. If you have employees, you’ll need to issue W2’s to them.

The next thing to do is to get all your documents ready by groups. These documents will all relate to your tax needs in some way. Thus you need to get organized.

The first group of documents you need to classify will be your previous tax forms and declarations. On this pile you should also include your spouse’s W2 forms, interest statements and such. Basically this group of documents classifies your tax history for the past years. If you are going to a new tax preparer this year, they will need these.

The second group of documents will relate to what kind of assets you may have bought during the year in question. This can include receipts or contracts for a new car purchase, trade confirmations in the acquisition of stocks and the like. Also should you have bought or sold a house in the year in question, put your escrow statement or closing papers on this pile.

The next pile or third group of documents will have to do with expenses. This is where all your receipts for all kinds of purchases go to. Thus in this pile you can put in all your business receipts, medical receipts and even tuition fees and school related expenses, whether they are for you or for a dependent.

After having done all of this general sorting out of documents, then you can basically take a breather as over fifty percent of your job is practically done. The next step would be to organize all the receipt categories….if you feel like you don’t have the time and energy, or just plain don’t want to do it yourself, hire a bookkeeper to categorize all your receipts into the appropriate tax categories before you go see the independent tax accountant to assist you in preparing your income tax returns, and getting these documents in order before hand will make his or her job easier and corresponding fees much less.

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