5 Tax Prep Tasks You Can Do Today (2024)

- Dec 6, 2021
- 4 min read

Want to get a head start on your taxes? While you can’t actually file your taxes until January 31, there’s plenty of prep work you can do well in advance, even as early as December or January.

Here are five tax prep tasks you can check off your to-do list long before taxes are due!

5 Tax Prep Tasks You Can Complete In Advance

1. Categorize your expenses.

Been slacking on categorizing your expenses throughout the year? December and January are the perfect time to catch up! When you categorize your expenses in Quickbooks, you 1) get a better sense of where your revenue went and 2) make it easier to calculate your deductions.

Not sure which categories to use? Start with these:

Continued education. This means courses, coaching, and even books and magazines directly related to your business.
Bank and credit card fees. Yep, you can write these off! These fees might seem small, but they add up over time, so it’s best to keep a close eye on them in Quickbooks.
Office supplies. Use a lot of notebooks? Buy a new desk chair? If these things are part of your business, you can write them off.
Advertising and marketing. This means the cost of keeping your website up and running, hiring a marketing agency, and running ads.
Utilities. Whether you have a brick and mortar shop or work out of your home office, you can deduct at least a portion of your utilities, mainly rent and your phone bill.
Software subscriptions. Don’t forget to write off the software you use to keep your business running: your CRM, your accounting software, etc.
Client gifts. You can deduct up to $25 in gifts per client per year.
Charitable donations. Just make sure you’re donating to a registered charity that’s recognized by the IRS.

2. Organize your receipts.

If you’ve been shoving your receipts into a box in the closet or random email folders, now is the time to organize them. This work can be tedious, and if you’re anything like me, you won’t want to waste time shuffling papers in January.

The basics of keeping and organizing receipts:

Keep receipts for anything over $75. This means meals, supplies, software subscriptions, advertising–basically, anything you want to write off. The IRS will want an explanation for all your expenses, including those under $75, but they don’t require a physical or digital receipt for those smaller purchases.
Keep your receipts for four years. Technically, the rule is three years past that receipt’s filed tax return, but I tell all my clients to opt for four years just to be safe. For large purchases like a car or expensive piece of equipment, keep the receipts for seven years.
Use a receipt storage tool. Some of my favorite apps to use are Receipt Bank, Expensify, Quickbooks, Dropbox, and Hubdoc. All of these make it super easy to scan, save, and organize your receipts in one place. Trust me, it’s a lot less stressful than a shoebox under your desk.

3. Issue your 1099s.

A 1099-NEC is a form you must issue to any non-employee that your business pays more than $600 over the course of the year. Most commonly, you’ll send these to contractors, coaches, and financial professionals. (The exception is anyone registered as a corporation or hired through a freelance marketplace, like Upwork or Fiver.)

To file a 1099, you’ll need two copies. For Copy A, you’ll fill in all the necessary information and submit it to the IRS. For Copy B, you’ll fill in the same information but send it to the contractor. You can find more information about filing your 1099s here;

Here’s the best part about 1099s: you can prepare them any time after you’re done paying your contractor for the year. If you hire a designer in February and stop working with them in a month, you can prepare that 1099 in March. Just keep in mind that you won’t be able to file them until the IRS starts accepting them in January of the following year.

4. Estimate what you’ll owe.

There’s nothing worse than thinking you know what you’ll owe, starting the filing process, and getting hit with a number that’s way higher than you were expecting. That’s why I recommend analyzing your numbers in December or January to estimate your total in advance.

This number doesn’t have to be exact, as you’ll calculate the exact total after the first of year. That being said, a close estimate will ease some of the shock of forking over thousands to the IRS.

If you use Quickbooks Online, you can calculate your taxes using TurboTax or by using the forms on the IRS website.

If you use Quickbooks Self-Employed, you’re in luck! The software includes an automated tax estimate tool, which you can find in the top right corner when viewing the platform on a computer. Remember, this estimate takes into account your prior quarterly payments, so make sure those are updated for the most accurate estimate.

5. Make your tax filing plan.

I’ve met plenty of business owners who do their tax prep well in advance and still end up filing on the last possible day. To avoid that last-minute panic, create your tax filing plan a month or two before you want to file.

Look at your 2022 calendar and block off two days: one for preparation and one for filing. Personally, I like to schedule a prep day in January to get everything organized, send out any final 1099s, and figure out my gameplan. Then, I block off a second day a bit later to finalize everything and file my taxes. Chances are, you’ll run into some questions or roadblocks during that first workday, so give yourself a buffer before you have to file.

Want to manage your money with confidence so you can focus on growing your business (and income)?

The more self-education you do throughout the year, the more confident (and less stressed) you’ll be at tax time. If you want to feel great about your financial skills, learn to navigate Quickbooks like a pro, and pay your taxes without the end-of-year panic, check out my course Quickbooks for Entrepreneurs!

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