Making April 15th less painful

15 April 2009

I have a very rocky relationship history with April 15. More often than not, I’d wake up on tax day with an anxious knot in my stomach and file an extension. Occasionally, I’d submit the taxes that day, but never without stress.

This year, things are different. Today, I woke up with no anxiety about taxes. Sure, I had to file our city earnings taxes and pay estimated taxes to state and feds. Easy stuff. The rest of the taxes were completed in March and the refunds have already been received.

What happened? Why the shift? It’s a combination of things, which I’ll share here in the hopes of making tax time for you next year a breeze. Here’s what we now do right:

1. Share the burden. For the first 17 years of our marriage, I handled all the financial details. In 2007, my husband very ably took it over. I still handle my business, but he does everything else. That is sweet relief.

2. Use financial software well. I’ve used Quicken for ages, but I used to enter data in batches, sporadically. In recent years, I’d save up a year’s worth of data to enter at once. Bad idea. My husband enters our financial data into Quicken daily. It’s part of his morning routine. (I’m not kidding.) So when it came time to do taxes, I had everything I needed for our house and his consulting businesses. (I wish I could say I did my bookkeeping for my business daily, but I don’t. I did catch up on 2008 by February 2009, though.)

3. Keep business and personal expenses separate. I don’t co-mingle business and personal funds which makes the Schedule C for my business easy to prepare.

4. Have a place to keep tax-related paper. I’m a big fan of Freedom Filer. One of its many strengths are its well-thought-out labels for storing paper related to taxes that have yet to be filed, as well as labels for filing completed taxes. When it came for me to fire up Turbo Tax, I had all the pieces of paper I needed handy.

5. Do it ourselves. After years of paying an enrolled agent to do my taxes, I decided to go back to Turbo Tax last year. When your ducks are in a row and you have a basic understanding of what’s deductible, Turbo Tax rocks, in my opinion.

I’m so happy to have mended my relationship with April 15. If your relationship with taxes is less than happy, don’t wait until January to think about taxes again. Start keeping track of your financial data immediately, establish a place to put tax-related paper, and enjoy a peaceful relationship with the IRS next year.

Tagged with: freedom filer, taxes