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Not only is it the year 2004 already, but it is TAX TIME AGAIN! If you work in show business and didn’t make a lot of money last year, you will definitely want to make sure all of your receipts are in order so you can claim all deductions that you are eligible for. If you are dreading tax time, you are certainly not alone. At this time of year, a lot of people are frantically looking for the previous year’s receipts of expenses they plan on claiming when they file their taxes. They are also trying to decide who will prepare their taxes; will they file the tax forms on their own, through a tax service or through a personal accountant? Undoubtedly the big question is, will you be able to pull it all together in time to meet the April 15th deadline?

At this point, you have got approximately a month to get all of your taxes done. While it might seem nearly impossible to get all this done in a month, things could be a lot easier if you simply plan ahead. If you are really behind with getting ready to file your tax return for this year, I suggest that you work as quickly as you can, gather everything you need, and get someone (e.g. accountant, tax service, etc) reputable to get those returns filed by the deadline.

However, if you are simply not going to make the tax deadline and you already know that you are not going to make it, you must still take action. Either you or someone reputable should file an extension to give yourself a little more time. Then you must still go through the daunting task of finding all the paperwork that is needed and the necessary professional to get the job done. Instead of focusing on how crazy tax time can be, let’s consider filing that extension this year and beginning now, to make sure that next year is a breeze. Think it can’t be done…think again. You will simply need a little discipline and a few dollars worth of office supplies to make things a lot better next year.

Let’s begin today with some very basic information and some very simple tools that will really help you to get organized and take a lot of the headache out of your 2004 tax return, which you will of course file in 2005 That may seem like a long way off, but if you don’t do something now to get organized, when it does arrive, you will be in the same situation that you are in now.

First and foremost, you need to decide how many exemptions you will claim on your 1099’s or W-2’s from your employer. This will in large part determine how much is taken out of your pay in taxes when you receive payment from an employer. Either you pay during the year or you have to settle at tax time. There are ways to offset some of the tax liabilities, but as with any of the information posted in this article, check with a qualified tax advisor before taking any actions. Your tax advisor can also make you aware of any deductions that you can claim and the limits on those deductions.

Next, get a box of manila envelopes from your local office supply store. You might also get a bold marker, a small box of rubber bands and a box of paper clips. You take them home and put them to use by labeling an envelope for each category needed. For instance, you might have envelopes labeled as follows:

2004receipts
20041099’s

Every time that you make a transaction that is tax deductible, simply take that receipt and drop it in the appropriate envelope. To save additional time at the end of the year, you might take the rubber bands or paper clips and bundle all the receipts in a particular category together.

At the end of the year, the first thing you do is to take new envelopes and label them for the New Year so that as soon as receipts for the next tax year begin to come in, you can begin to file them away for the next tax year. After you have done this, take a few hours on Saturday or Sunday to get the entire tax year together and be ready to file.

You total all of the receipts in each category and create a Word document listing all the deductions and amounts. Also, be sure to hold on to all receipts, just in case you ever need to prove the deductions to the IRS. Then you can file your taxes using the Word document as a guide for deductions or simply turn over the Word document and the envelope with all 1099’s and W-2’s to your accountant.

This makes the entire process so much quicker and will sometimes even save you money because the return doesn’t take nearly as long to file. Most of the work is already done and you or the accountant only has to plug in the numbers and be sure that all the deductions listed on your document are allowed.

Remember that all you are doing during the course of the year is dropping receipts into an envelope; at the beginning of the next year, you are dropping 1099’s and W-2’s into another envelope. Then you are taking a couple of hours out of one day to total all your deductions and create a Word document. Then you are preparing or having a professional tax advisor prepare your tax return and putting it in the mail. By the way, what you pay your tax advisor may be allowed as a business expense and may be tax deductible as well.

There you have it. Two envelops, a couple of rubber bands, paper clips and a bold marker. Purchasing and using these supplies will help to make your tax preparation easier and less time consuming. You don’t have to go looking for anything because everything that relates to filing your taxes is in one of two envelopes and ready to go. After you file your taxes, you place your copy of the tax returns in the same envelope and file it away for safekeeping. If you ever need financial information, it is all there in one place, clearly labeled on the front of the envelope. With that said, HAPPY FILING! And even happier filing next year.