Harold Baldwin

My taxes are a mess, or rather doing them is. I run a small business to make it even worse, am I am semi organized at best. Today found me with a large pile or receipts for just about everything that needed to be organized and tallied and more.

I start by making 12 piles, one for each month, plus 3 additional piles for health care, credit card statements, and miscellaneous. Then I go through each monthly pile, one by one, and write the amount of each receipt into a spiral bound notebook, one page for each month. Since I have no employees, this works out very well as one page is enough. Now just making the piles and going through them to write down the info easily takes over a day.

Next I tackle the credit card statements, looking though for tax deductible business expenses I've missed. There are always a lot, and include everything that is regularly billed or delivered online. These also get written down into the notebook.

I follow this by going through my one checkbook that I use for both business and personal expenses for additional missing data, and this usually includes child care, donations, and office rent.

Tallying up the mileage I drove for business is always challenging. I have a smaller notebook for this, about 4 by 6 inches, and try to write the mileage from each business trip down at least weekly, but I really miss a lot. Fortunately my calendar contains all my meetings, conferences, and similar events and their locations so it's pretty easy to get all the business trips down and add up all the mileage.

Adding up all my business expenses is more difficult as I have different categories which do sometimes vary by year. I determine the general categories like office supplies, Internet services, food and entertainment, and capital equipment, and choose a shape for each. Month by month I use the appropriate shape to circle/box/star/trapezoid/etc. each of the expenses. This is made somewhat easier since I tend to group similar expenses together in the notebook. For example I always put food near the bottom of the page. I add each category by quarter, so for each category I have 4 numbers, one per quarter. I double check these, meaning re-add them, and if they are off by a buck or less I don't worry about it. I write all this information, everything above, into a Microsoft Word document that I'll eventually print out and send to my accountant.

I also gather my tax paperwork from others such as 1099s and other official forms from banks, clients, and other financial institutions. I transfer the figures to my letter to my accountant and include photocopies just in case he wants to see them for more information. "Now what did I forget," is my next thought, and over the next few days usually I think of something and add the information to the letter for my accountant. I mail it off to him, he usually calls with a very few additional questions, and that's it, except for paying of course. Getting taxes ready for my accountant is rather dull yet important. I drink plenty of coffee, usually using a Single Serve Coffee Maker so every cup is extremely fresh. Today I used my French Press Coffee Pot.

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