If your New Year’s resolution was to eat better, exercise more, or lower your stress, statistics indicate that by now you’re either backsliding or have long since thrown in the towel. If your resolution was to submit your small business tax return in a timely and efficient manner, you’re moment of truth is at hand. Whether you have the expertise to “do it yourself,” or you rely on the services of a tax professional, here’s good news: You can make peace with the Tax Man through organization, preparation, and efficiency.

What to do TODAY?

Organization is the key to life. An overstatement? Not if the life in question is that of a small business owner. Systemizing the location of files, forms, and receipts, and creating a user-friendly office space will immediately increase the efficiency of the average office dweller. Habitual “pilers” may ask, “Where do I begin?” Step One: Clear the clutter. Get rid of the forest so you can see the trees. For practical advice on how to get started I recommend the book, Clear Your Clutter with Feng Shui, by Karen Kingston. Taking Kingston’s cues, you will soon experience, and come to crave, the emotional lift achievable with each item sorted and cleared from your surroundings.

Clearing the clutter means more than throwing everything away. The goal is to reach a higher degree of organizational planning and execution. Every document arriving at your office has a destination—be it the trashcan (via the paper shredder for sensitive correspondence), or an easily referenced filing system. Designate a spot to file the mail, articles, forms (a.k.a. clutter) that appear too crucial to discard. If a fireproof file cabinet is still on your wish list, utilize inexpensive plastic file bins from your local discount store. With a tidy office and a detailed filing system, you are in a much better position to take on the Tax Man.

Smart Tips for Making Peace with the Tax Man TODAY

• Get started. There will never be an ideal time to begin this task. And it’s rarely as awful as you imagine.
• Be prepared. Establish files specifically for tax-related information. As relevant documents pile up you can move them directly to folders labeled FORMS, BILLS, RECEIPTS, ARTICLES, MILEAGE LOG, etc.
• Read up on new tax laws, benefits and penalties (TaxMama.com is a great place to start).
• Scan the Web, magazines, and newspapers for tax-related articles that you can read while eating breakfast, waiting for the dentist, or standing in line at the post office.
• Visit CR's Professional Links page for valuable resources such as a free IRS business calendar, NOLO’s free small business tax advice, and the US Small Business Administration’s tax-related guidance. Print these pages today and read them on the treadmill this weekend!
• Get it done fast. If you’re a small operation, tax-prep software, online forms, and E-filing are designed specifically to make the process quick and easy.
  

If you’re even modestly successful, chances are you’ve got a lot on your plate. So why should you educate yourself on the complexities of small business taxes when you can pay someone else to handle it? Because there is little chance you can make smart decisions about your business, and soundly evaluate the proficiency of your advisors, without a keen understanding of the issues at hand. Still not sold? Think of getting yourself up to speed on tax issues as a means of maximizing the return on your investment of time. The better prepared and organized you are for meetings with your financial advisors, the less you will pay in professional service fees (and the more likely you are to make smart, far reaching decisions on the spot).

What to do TOMORROW?

After your tax return is completed and in the mail (and you’ve finished giving yourself a well-earned pat on the back), you’ve got just a few more things to do before collapsing on the couch. Use your momentum to make next year’s experience even smoother by capitalizing on the knowledge you’ve amassed while it’s fresh in your mind.

Smart Tips for Making Peace with the Tax Man TOMORROW

• Move the remnants of your 2003 tax experience (forms, stubs, receipts, and copies) to an archived tax file.
• Begin anew by creating a new set of folders for 2004 bills, receipts, etc.
• Keep track of expenses by using a single credit card for all business purchases, or by logging expenses in a business software package or spreadsheet as they incur.
• Use this recent tax experience and financial analysis to update revenue and expense forecasts, alter how you pay estimated taxes, and further hone your financial activities for 2004.
• Sign up for a class on small business finances to help optimize all benefits available to you and be in a better position to find and work effectively with business and financial advisors.
• Create an office environment in which you feel comfortable and happy – it’s hard to be organized, prepared, and efficient without the proper tools and setting.
  
  Avoidance is a natural response when it comes to death and taxes. But we know we can’t hide forever. Besides, using the advice in this article, we know that our tax tracking and reporting process will be easier this year. We’re going to be organized, prepared, and in control. In fact, next year, we’ll sit at our uncluttered desk beside organized files and look forward to the Tax Man’s visit. Well, maybe...

© 2003 Jill Toole, M.B.A.