July 23, 2016

Open Thread: How Did You Handle Your Taxes?

For those of us in the United States, Tax Day is tomorrow (gulp). A few counties in my area have been granted an extension due to flooding, but I’d already tallied up my income and expenses and shipped it off to my accountant last month.

Naturally, the spreadsheet I spent several hours laboring over somehow got corrupted during the saving process (the single most important document of the year and my laptop goes rogue on me – seriously?). Fortunately, I had an earlier, non-colored coded version on my computer, so I just used that one.

I’m no tax expert (nor do I play one on TV), but the thing has kept me sane over the last few years filing taxes as a self-employed professional is Gmail labels. Each time I order something online for my business, whether it’s conference admission or some computer gadget, I label it “2010 business expense.” Reoccurring expenses like Skype get labeled automatically using Gmail filters. I use a similar system for charitable contributions. Then in February or March, I can tally up my expenses and donations in an hour or less.

What’s your tax season strategy? Do you keep careful records over the course of the year or scramble to find old receipts and invoices? Do you use an accountant or the DIY method?

For more on taxes, check out my interview with Brigitte A. Thompson, author of Bookkeeping Basics For Freelance Writers.

Flickr photo courtesy of David Reber’s Hammer Photography


  1. I do most of my deductible shopping online with my debit card or PayPal. PayPal sends an email with details, which I print to PDF in my "Receipts" folder with the date.

    Using Quicken, I do transaction downloads directly from my online banking site.

    Again in Quicken, there's enough categories set up to fit most everything in, both income and expenses.

    There's a big envelope by my desk labeled "BHJ 2010" which gets any paper receipts such as cash purchases, shipping papers, etc. It's also got the year's starting mileage for the car.

    I'm also a business consultant and keep my time in an Access database. I log date, client, work done and mileage. The invoices are easy to make and during the tax cycle the next year, it's a 2-minute "effort" to dump the mileage log. That's an easy way to get a $3,500 deduction.

    Between the several filing methods during the year, it might take me an hour to gather all the data needed actually to do the taxes.

    Then after the taxes are done (I do everything myself), I scan all the receipts, etc., zip up the entire directory and drop it into my "taxes" directory which has everything electronically since 1995.

    I guess the "secret" is keeping the records as you go along. That debit/credit card transaction for $373.47 isn't so much a mystery if you've categorized it with a memo within a couple days of it appearing on your account activity. Not so easy six to ten months later.

  2. Jennifer Escalona says:

    I use Outright.com! It's free, simple, and allows for integration with sites like Paypal so you rarely have to enter expenses. It also fills out your schedule C at the end of the year. Before Outright, I was doing spreadsheet thing, too, and I can honestly say that I will never, ever, ever, ever, ever go back.

    (Full disclosure: Though I was an Outright user first, I'm Outright.com's social media manager these days. But I would never shill for an app unless I really, really believed in it!)

  3. Thursday Bram says:

    I have a CPA and I'm incredibly glad of that fact. I actually found him online and he'll handle just about anything via email. He's even on Twitter — @RamlCPA.

    I use Quickbooks over the course of the year, but I've made the process of entering information much easier. All my business expenses are made through one debit card, no exceptions. No non-business expenses are made on that card, either. That means I spend a little time each month, reconciling my statement and that's it.

  4. Susan Johnston says:

    Sounds like you all have systems in place, which is great. The worst is when you simply wait until early April and realize you have no clue where anything is!

    Jennifer: I'll look into Outright. Sounds like a great site!

  5. I'm taking notes. This is my weak area, as I suspect is the case with many creative types. But I'm determined to learn. 🙂

  6. I have an Excel book that has multiple spreadsheets in it: Summary (all projects and addresses for the year), Income, Expense, Mileage, Pitches, etc. All I have to do is auto sum it and give it to my acct/hubby. I put a blank copy of it on my forum at About.com.

  7. Vasilios says:

    An excellent and timely topic, Susan. Let me give you a Canadian point of view.

    As I live in Quebec, Canada, I have to do two tax filings. One for Canada and one for Quebec. The Quebec tax form is actually more complicated as there are attachments such as a form for the prescription drug plan, a form for the real estate tax refund, etc.

    That said, I have been doing it for the entire family for many years now. That's four family members multiplied by two tax forms equals eight tax returns.

    And I never have resorted to a computer; just pen and paper and a calculator. Some habits can not be shaken away.

    Good news is that they are not due until the end of April; that's the case each year. Also they aren't all that complicated to figure out; very user friendly.

    More bad news though. As good as I may be with the written word, I am terrible with concentrating when it comes to numbers. Lots of triple checks and I still get errors.

    At the end of the day, though, it gets sent in on time. And yes, it's true. We are heavily taxed in Canada, mostly because of our social programs. In particular, the Medicare program, entailing free hospital care and reduced drug costs.

    Can't get something for nothing, I suppose.

  8. Sara Aase says:

    I created a Google doc with all the categories I need, then do a save-as every year; many of the expenses stay the same, such as association dues. That's a great idea, though, to also use Gmail labels to catch stuff you may otherwise not remember to record!

  9. The Attorney and The Writer says:

    Since getting married, I got a plastic filing bin, and put all tax-related papers in one folder and in July and January, I'll go through and sort each into its file. For now, all my freelance papers just go in one file. Then in July, I make a quick spreadsheet with all the numbers and update that sheet in Jaunary. My husband started his own law office last summer so I do the same for him, except monthly. And thankfully with that change, we hired a CPA. He was at the computer filing last year near midnight on April 15, and I said this would be the last year. And, it's been so worthwhile to actually plan ahead and minimize our tax liability!