How to Prepare Your Documents for Tax Season

TL;DR:

• Tax preparation is a year-round activity, not a seasonal crisis
• You need: income records, expense receipts, bank statements, vendor invoices, asset purchases
• If you've been extracting data throughout the year, tax prep is already done
• Match expense categories to your tax return categories for easy deduction mapping

Start Before You Need To

The worst time to organize your business documents is March, when your accountant needs everything yesterday and you're digging through a year's worth of unsorted paperwork. The best time is right now, regardless of what month it is.

The Documents You Need

Income records: Invoices sent, payment receipts, 1099s, platform statements.

Expense receipts: Every business expense, categorized and totaled.

Bank statements: All business account statements for the tax year.

Vendor invoices: Bills paid for goods and services.

Payroll records: If you have employees. W-2s, payroll reports.

Asset purchases: Receipts for equipment, vehicles, or other depreciable assets.

The Extraction Advantage

If you've been extracting document data throughout the year using Siftly, tax preparation is essentially done. Your expense tracking spreadsheet already has categorized totals. Your invoice tracker shows all income. Your vendor payments are logged. You just export the summary data and hand it to your accountant.

If you haven't been extracting throughout the year, you can still catch up. Batch-process the year's documents through Siftly; it'll take an afternoon instead of a year, but you'll end up in the same place.

The Handoff

Make sure your expense categories match the categories on your tax return (Schedule C for sole proprietors). Common deductible categories: advertising, car and truck expenses, insurance, office expenses, supplies, travel, meals (50% deductible), utilities, and professional services.

Give your accountant two things: organized spreadsheets with category totals and access to the original documents via a shared Google Drive folder. Clean, efficient, no shoeboxes involved.