Bookkeeping strategies, tips and a little tax planning can greatly decrease the painful stress many taxpayers endure during tax season. In our previous blog, we opened the topic of the stress caused by tax season, and how to alleviate it.
Better bookkeeping and a new mindset for a financial organization were the heart of that blog and its four tips. As promised, this blog will continue this topic. So now we add a fifth tip for you, which will save you a great deal of anxiety when tax time arrives.
5. Bookkeeping with Your Calendar: Know the tax dates
A woman in Tax Distress
Naturally, we all know that April is that nail-biting month every taxpayer dreads but there are several other dates that are important during the year.
For example, if you have a business, or if you are just starting one, be aware that Quarterly Taxes for your business are due the 15th of April, June, September, and January. Now you know, mark those dates, then file and pay on time.
6. The Big Day in January for Bookkeeping, Tax Strategizing and Accounting
Our sixth stress-reducing tip is to make January 31st a red letter day for checking on tax documents. By that day, you should have all your W-2’s and 1099’s. That is the time to check on W-2s or 1099’s that should be in your tax documents file.
What if you do not have them?
We suggest you double-check:
- Your IRA program manager,
- Former employers,
- Companies for whom you did consultancy work during the past year.
As we stated last week, taking the time to organize your tax information beyond receipts in shoeboxes can make a really big difference in your stress level when tax time rolls around. Be aware of tax planning all year long, not just one terrifying month, week, or day per year. A little planning now saves a lot of stress later.
Tax Planning, Bookkeeping, and a Little Financial Planning
Now that we have your attention because of de-stressing for tax time, perhaps it’s also time to reveal a plan for getting your general finances in order. Unless you never stress about finances, then perhaps you should consider taking a second look at how you are planning your fiscal life.
Step One: Take Bookkeeping Inventory
We suggest you begin by creating a list of your debts and rank them highest to lowest. Here’s a little checklist for a financial inventory for you to follow at this special site.
Step One: Note your outstanding balances.
- Write down the interest rate of each debt.
- Notate your minimum monthly payments on each account.
Planning A No-Stress Strategy: Month by Month and Enjoy Financial Control and a No-Stress Tax Season in 2019.
Step Two: Review the typical Cash Flow.
In other words, list answers to these questions:
- How much income do you actually bring home every payday?
- What do you save from the left-over dollars after basic expenses?
Step Three: Doing a Little Math
Don’t beat yourself up too badly if you do not have many dollars left after subtracting debts from income. In fact, that is the condition of many people, and only a few of them want to change so much that they go a financial planner’s office.
We have seen cases with numbers like these after a detailed class flow analysis:
Net Monthly Take home: 6,000.00
Payments and Expenses: 8,000.00
Ouch, right? They were literally “off the rails,” in spending habit behavior, thanks to student loans, a home loan, two cars, credit card debt and their own spending habits.
What’s worse, sometimes families are unaware that their debt is continually mushrooming at a rate of 2,000 per month. If your numbers are like those above, then, move to Step Four:
The Big Step Four: Harness Your Bookkeeping by Analyzing Where the Money Goes and Making a New Budget
In the first place, divide the expenses between those that are fixed those that vary monthly. Fixed expenses include items like your home mortgage payment, your car, your groceries, and your utilities. Variable expenses include categories like your entertainment dollars. (Yes, this category is for items like travel, restaurant dinners, cable television shows, golfing expenses and shoe collections.)
Bookkeeping, Budgets and New Lifestyles
Each month, in most cases with figures like those in our example, we discovered that at least 1,500.00-2500.00 worth of items per month could be adjusted in order cut down on spending and repay debts. What we don’t know and never will know is how to prevent pain in the process of learning how to live within your means.
Now, we know getting finances back on track is not easy. While letting go of certain spending habits hurts, you can take it from AP Accounting and Tax Services, it is not as agonizing as the financial tension and stress that can stretch your nerves to the breaking point. AP Accounting and Tax Services will feature more blogs in the future with additional bookkeeping and financial planning measures to help you get your financial life back on track.
Mother’s Day Should Be a Week Long!
We would feel remiss if we did mention Mother’s Day, Sunday’s glorious tribute to the hearts of families, “Mom.”
One day hardly seems enough to commemorate the beauty and love of the women who make our lives great, worthwhile, and wonderful. Here then are words that we could use anytime. At AP Accounting and Tax Services, we know you will agree with them.
‘God made a wonderful mother,
Mother’s Day Should Be a Lifetime Long.
A mother who never grows old;
He made her smile of the sunshine,
And He molded her heart of pure gold;
In her eyes, He placed bright shining stars,
In her cheeks fair roses you see;
God made a wonderful mother,
And He gave that dear mother to me.’
Thus we hope all the mothers out there enjoy an entire year’s worth of good wishes.
