How Organizing Your Finances Now Can Help With Next Year’s Taxes

To file your own taxes, you’ll need to keep track of key information, such as your income, expenses, and deductions. Here are some ways you can structure your budget to help do your own taxes.
taxes

So you’ve decided to take a stab at doing your own taxes for the first time. Go, you! A big part of filing your taxes DIY-style is keeping accurate track of key info such as your income, expenses, and deductions. By finding that info quickly, you can create a system to make it easier for you. Here are some ways you can organize your finances now to help with doing your own taxes.

Create a hashtag system

While you don’t have to check this every single day, it helps to check it on a regular basis to make sure your transactions are well organized. If you’re a Simple customer, you can add hashtags, and use the Reports feature on the Simple web app to track your spending by hashtag (or category, location, etc.).

When you swipe your card, pay a friend, or pay a bill, check to see if it’s something you can deduct for taxes. If it is, first make sure it’s in a category that makes sense for you, and that you can easily track it later. For instance, if your job allows for you to write off the car mileage for taxes, while its default category is “gas,” if it’s a company car, you might want it to go under “other transportation” instead.

Next, use a series of hashtags so that you can easily find it later. For instance, you can use the hashtags “taxes,” “car,” and “mileage.” Or, if you write restaurant reviews on the side, you can create a hashtag “foodreview” or “forwork” when you dine for your gig. You can start by adding a couple of hashtags, and add more down the line if it might be useful to do so. Do whatever works for you, as long as it’s a system that’s easy for you to remember, and stick to the system you created.

This can come in handy if you went on a business trip and some of the money you spent can be deducted for taxes. You can do a quick search for the city in which you attended a work-related conference, such as New Orleans or Los Angeles, then scour through your transactions and add a hashtag to note which expenses you can write off.

Keep all the info in one place

Besides keeping track of your expenses with separate categories, having all the info you need in one place will make the process of doing your own taxes as effortless as possible. You can snap a quick photo of a receipt or a credit card statement and attach it to a specific transaction in your Simple account. Don’t forget to hashtag it for easy finding later! This will spare you the agony of rifling through a stack of old receipts. Besides receipts and statements, you can also add notes such as “Don’t forget to put toward your tax fund” in the memo section.

Sock away funds to pay for your taxes

If you work for yourself or have had to pay taxes in years past, you can set a yearlong savings goal for your taxes, and tuck away a portion after every paycheck. You might also want to create a separate savings goal to pay your estimated quarterly taxes. That way, come tax time, you’ll be well on top of things. And if you have an account with us, you can pay your taxes through Simple, or have your tax refund sent to your Simple account.

By creating a structure and system for your budget, you’ll be able to do your own taxes like a pro. And there’s really no need to be worried about getting it perfect from the get-go, either. You can always make adjustments along the way.

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