Every year I see the questions about taxes in February, March and April. Most of them have one central theme: How can I pay less tax? Great question. Lousy timing.
That’s because the question is being asked too late to make much of a difference. If you want to save taxes in 2010, you need to ask that question IN 2010. Not in 2011, when you are preparing the tax returns.
And the question I ask, year after year, is why people go out of their way to pay more tax? The reason, I think is that they really don’t know how much in tax they’re going to pay until the next year when it’s too late.
Why? For many of them, I think it’s because they have no idea how much their taxable income (and thus the taxes) are going to be until it’s too late.
That’s the hidden cost of bad bookkeeping. The not so hidden cost is easy. Chances are you can find a bookkeeper for $50-$75/hour. So, you can pay a good qualified bookkeeper that rate when everything is fresh in your mind. Or you can wait until you can’t remember and your records are largely gone, plus you’re now having to pay much higher rates for someone in your CPA’s office at their very busiest time.
Don’t procrastinate on your bookkeeping.