Tax Tips for Working With Your Accountant

March 9, 2008

Even if you hire someone to prepare your taxes, there is still work to be done to gather all the information your tax preparer needs.  The tax return your accountant creates will only be as good as the information that you provide them.

I think one of the biggest misconceptions about having someone else do your taxes is that there’s no work required for you. The truth is there is work required to gather and organize your information, if you do this throughout the year it’ll be much easier on you come tax time.

Tax Records & Organization
We’re having a good friend of ours prepare our tax return this year. After dropping off some information a few days ago, my friend called to remind me that I’d forgotten a few tax forms and some business finance information so I spent part of today gathering them.  I felt like I did a decent job during the year tracking and storing the necessary information but it still took me a while to get what he needed.

One of the problems I ran into was that I had kept information on two different computers in a variety of folders so I had to spend time bringing it all together and making sure I had the most recent version of each. I was reminded of two things: 1) Taxes are such a pain 2) Staying organized and up to date on your records can definitely make a difference.

Tax Review
If you do keep track of your finances throughout the year, it definitely pays to look over the information before handing it over to your accountant. As I went back over the business spreadsheet I’m sending him I realized I had overlooked about $800 in income.  The good news is that I caught it, the bad news is I didn’t include it when figuring my estimated tax payments for 2007. 

Securing Tax Data
Working with your accountant can be a multi-step process, once they’ve looked over your documents they may have questions and need more information.  It may be faster or more convenient to give them a digital copy of the information they need.

One of the problems I’ve had with this is securely transferring my financial documents without allowing anyone else to snoop on the contents.  What I ended up doing was zipping up the files and password protecting them with WinZip but it’s not the most secure and sometimes the person’s software on the other end can’t unencrypt the files. Can anyone recommend a tool or service that offers secure way to transfer files across the web using just a web browser or email?


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Ben Edwards, the founder of Money Smart Life, saved up enough to buy a Nintendo back when he was 12 years old. When he used the money to buy shares of Wal-Mart stock instead, he knew he wasn't like the other kids... His addiction to personal finance has paid off for his family and now he's helping you to afford the life that you want. Check him out on the web at Google Plus, Twitter and Facebook.

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