Tips To Be Your Own Accountant
Date: October 19, 2016
Most people only think about accountants at tax time, but running the numbers is a year-long duty. A good accountant can take some of the tedium out of doing your paperwork, but the reality is that many people can handle being their own accountant just fine. An eye for detail and a knack with numbers can save you hundreds or even thousands of dollars on a professional accountant. Some simple tips can help you get the job done yourself.
Use Free Tax Help
Hiring an accountant might be unnecessary if you don't own a business and have a relatively simple tax life. Your biggest need will probably arise when it comes time to file your taxes, which can be daunting for those unfamiliar with the process. You can use the Internal Revenue Service's "free file" program for simple returns, and get complimentary help along the way. The IRS works through various software providers to offer many taxpayers free returns. The programs walk you through filing and provide responses for common tax questions.
Pay for Financial Software
You're most likely to think about hiring an accountant if you run a business or otherwise have a complicated financial life. The free-file software that's available for simple tax returns is not the only option you have when it comes to getting first-rate accounting help. Financial software programs, such as Quicken, offer high-level tax and accounting assistance at a cost significantly less than what a professional accountant might charge.
One of the main benefits of using high-level financial software is that all your entries throughout the year are categorized and recorded. It's all permanently stored for you in an easy-to-access format. The programs also include extensive self-help chapters and other tools to help you maintain and process your financial information year-round.
Take Advantage of Online Records
One enormous benefit of electronic records is that you can access almost all your financial information at the touch of a button. For example, many employers offer online W-2s and other tax forms so you'll have access to these vital tax documents when you need them even if you're not good at keeping an eye on your mail. Most investment firms keep records on their websites of all your buys, sells, transfers and other distributions. You can keep track of all this critical information year-round by setting up an account with online access. Rather than wading through stacks of paperwork that you have to throw on your accountant's desk, you can simply click on these online documents when you need to access them.
Keep Diligent Files
Meticulous record-keeping is a critical step in being your own accountant, particularly if you own a business. Although many personal records are available online, your customer transactions may not be – especially if you run a cash-based business. You'll have to organize and keep up-to-date books to properly track your income and expenses, create financial reports, and compile all the information necessary to file your taxes successfully.
You may not be able to access all your records online even for your personal finances. For example, charitable donations might only be recorded on a simple piece of paper. You'll have to stay on top of your paperwork and observe record-keeping standards — such as the IRS’ recommendation that you keep a copy of your filed tax returns for at least three years — to be your own successful accountant.
- Being own accountant
- Accounting tips
Doing own taxes