For many of you, tax time makes you sick to your stomach. But it doesn’t have to. You don’t need to lose sleep waiting for the call from your accountant or stressing when you pull out a shoebox full of receipts. Today, we will teach you how to organise your receipts for easier preparation for next year’s tax time.
1. Collect and Keep All Relevant Receipts
Many people think that if a receipt says “scrap metal” or “receipt for deposit”, it doesn’t have to be kept. But in truth, it does. You never know when this information will come in handy. If you have spent many an hour sorting through old receipts, trying to find a specific one for some reason, you know how time-consuming and frustrating it can be.
The easiest way to avoid this is to collect all relevant receipts and stick them in one place. You can save these receipts in a shoebox or buy a “receipt keeper” and store all your receipts in that.
If you do not keep all receipts, you can find yourself in a situation where you lose a receipt and end up with a higher tax bill.
2. Don’t Use Highlighter on Your Receipts
When the holidays roll around, many people like to highlight their receipts to make it easier to find the right ones come tax time. The problem is when you go to file them, the highlighter ink bleeds through, and you can’t use the receipt.
What you can do is write on your receipts with a pencil, and it will not bleed through. That way, you can highlight your receipts and use them again in your next tax season without fear of any interference from the ink.
3. Have a Filing Cabinet for Your Receipts
It is okay to have receipts from this year in your shoebox, but it is also a good idea to start putting them in a filing cabinet. Next year you won’t be searching through a mess of crumpled receipts to find the one you want. You will be able to look it up by date and type.
If you decide to use a filing cabinet, you will label it with a sticky note and a permanent marker. If it has both the purchase date and the receipts, you will be able to quickly go through the filing cabinet and find the receipt you need.
4. Put Taxable Purchases in One Area
If you suddenly start receiving an influx of receipts and you have nowhere to store them, you can start storing all your business receipts in one place. This way, you can easily file them later on and not stress over the mass amounts of receipts you are now receiving.
Get Those Receipts and Taxes in Order
Preparing for your taxes is stressful enough, even without the added headache of receipts. But receipts and taxes go hand in hand, and you can’t go with one without the other. As long as you have a small organisation, you can easily find receipts when you need them and be confident that you are filing the right amount for your tax return. If you want to make it easier on yourself, you can put your receipts in a filing cabinet, label them and never have to stress over receipts again!
SMB Accounting is one of the best accounting firms on the Sunshine Coast. We do individual tax returns, small business accounting with various small business accounting packages available, SMSF audit and Xero accounting software-based accounting business. Contact us!