Reliable Recordkeeping Helps at Tax Time

Tax season is here! This season can be stressful for farm managers that are unsatisfied with their recordkeeping systems and patterns. Important information to track for farm taxes can be extensive and diverse. Even farmers with keen attention to detail may struggle to feel confident that their records are complete and organized come tax time.

While there is no one right way to organize your records for tax prep, here are some ideas that may help simplify the bulk of paperwork you process:

Utilize secure cloud services via computer & smartphone- Many smartphones have tools now where you can use your phone camera to take photos of documents (receipts, invoices, bills, etc.) and turn the photos into pdfs that you can name, save, and sort. You could take the photo immediately when you get a document, name it, save it, back up the files in multiple places, make it accessible from any device you want, and toss the bulk of the paper pieces. If you find a good system that makes sense to you, it can be much easier to sort and pull documents as needed.

Personal testimony- My current phone has the option to “scan” documents with the camera, but I also have an app that works with my home printer that does this too. Printers are on the market for less than $100 that print, copy, and scan in collaboration with smartphones. In my opinion, it has been worth every penny to help with record keeping and cut down on clutter.

Create dedicated accounts/cards/checks- Many farm operations have separate accounts to track income and expenses for avenues of their business and home. Although creating separation of accounts sounds daunting, it can actually save you time and effort in the long run. If you have the ability to work with your bank to set up accounts for certain distinctions/purposes, that can also help with recordkeeping. Often you can work to have them linked together if you need to do funds transfers, but keep income and expenses separate by account.

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