It seems like there are three types of people out there when it comes to year-end and procrastinating. Which one would you classify yourself as?
- The uber prepared – You have been preparing for year-end all year long! You have a checklist of what you need to do and everything is tidy and organized, just like the rest of your life.
- Somewhat prepared – You were a little shocked when you realized it was time for year-end again. But at the end of December or early January, you started getting everything together and tidied up.
- Procrastinator – Every year you file an extension for your taxes and even then wait until the final deadline is approaching to get your records together. Once you are done, you pray that you don’t have to think about year-end and taxes for at least another nine or twelve months or so.
Which one are you? Most of us (minus the uber prepared) probably have room for improvement. Think about which one you are now, and which one you would like to be.
Here are three tips to help you to stop being a procrastinator with regards to the year-end work and being prepared for filing your taxes:
Tip 1: Start early – Look over the reports your bookkeeper provides every quarter. This will help you to be mentally prepared for what you will have to do for year-end. This will help you to have a better idea about how much you will owe for taxes. Gather W-9s throughout the year for any new vendors so that 1099 time will be less stressful. We encourage our clients to attach their vendors’ W-9s to the related contact in Xero.
Tip 2: Think about the positives. Its always good to look at the bright side of things. When it comes to procrastinating it might feel good at the moment to not deal with the issue but it is always in the back of your mind and adds unneeded stress. By thinking ahead and planning ahead for year-end throughout the year, you can reduce your stress and feel ready to take on the new year.
Tip 3: Save for taxes. Have you thought about having a separate bank account for tax savings? By having a dedicated savings account just for taxes, you can make sure that you are prepared and that that money is ready for you to use it on your taxes. Sometimes the scariest part of year-end is not knowing if you have the cash flow to pay your taxes.
Make this year the year you decide to stop procrastinating. We are still in January, so now is a great time to get started with good habits for next years year-end. By implementing these tips, you can relieve a lot of stress and feel good about year-end and maybe even paying your taxes will be less taxing!
Let us know if you implement any of these tips and how they changed your year and your viewpoint on your year-end tasks.