Tax time can be a real headache for a lot of us.  It is tough to keep track of all the information necessary to complete the tax returns that Uncle Sam wants us to fill out every year, so here are a few tips to making things easier.

First, get a folder or box that you can put information in for later without worrying if it will get up and walk away on you (if you have kids this proves to be harder than you would think).  Throughout the year and especially at the end of the year, as that is when most of your tax information comes to you, begin placing all the documents you need to do your taxes in the folder or box.  This way when it comes time to do your taxes it is all in the box.

Next, if you have more tax information than the next person, say in the case of a small business owner, take your folder/box and enter everything into a bookkeeping software like QuickBooks or Quicken or you could even use Excel if you know how to use it well.  You should enter everything into your software at least Quarterly or Monthly.  This way the information is not only kept for tax time but presented in a manner that makes it easier to understand and less of a headache to deal with at tax time.

Finally, if you have a complex tax situation or you just have a lot of information that needs to be entered, hire a bookkeeper to do the data entry and help you plan for taxes.  The key is that you are keeping track of the information as-you-go and not at the end of the year.

If you do these things tax time can be a breeze.  No headache at all.

One thing that I have found that works really well for most small businesses is to develop a good relationship with a great bookkeeper and have him keep you up to date throughout the year.  Even if it seems like you don't have that many transactions each month, it pays to have your bookkeeper do this for several reasons.

First, you won't miss anything.  The sooner it gets recorded, the less potential for loss of information like lost receipts.  Also, you remember the transaction clearly and are able to explain it properly to your bookkeeper.  There is no worse headache than at the end of the year trying to figure out just what happened in January.

Next, you will find more deductions.  Doing your bookkeeping throughout the year instead of at the end of the year helps you to find things that you never would have thought of later.  This helps you get in a better tax situation, and who doesn't want to pay less tax at the end of the year.

Another reason to do your bookkeeping "as you go" is the relationship you get with your bookkeeper.  If he/she is a good one and you have a great relationship with him/her, they will look out for you and help you find a different way of approaching the oncoming taxes.  There are always more than one way to do things and your bookkeeper is your key to this door of possibility.

Finally, and probably the most important reason is that you will know where you are at "as you go" instead of at the end of the year.  As a business owner you should never have to ask the question at the end of the year, "How did I do?".  You should already know because you have been keeping track.  You should not be surprised by the tax bill at the end of the year because you already planned on it.