Organize These Tax Time Chores Now

Organize These Tax Time Chores Now

Is it really time to start thinking about taxes? With the holiday rush making life crazy, do thoughts of W-2s and tax deadlines make your head spin?

Taking a few minutes now to start organizing your papers can save you time and headaches come tax filing time. Even if you have someone else do your taxes, getting yourself organized saves your tax preparer the frustration (and you the extra cost) of having to straighten things out before work begins. If your accountant doesn’t have to call you for missing paperwork or inaccurate numbers, the process moves faster and your taxes can be filed sooner. Earlier filing means you’ll have your refund that much sooner.

Here’s what you can do now.

Start a File

Take a large envelope or a manila file and label it Taxes 2014 and then diligently collect all the tax information that will be coming your way over the next month or so. Triple check all your account numbers so you have what you need. Start poking around your desk or file cabinets for any missed receipts you might need (like for the couch you donated back in February).

Include these other items:

Interest InformationYou’ll want to put in any bank statements, mortgage interest statements, financial information for retirement accounts, or documents from your accountants or account managers into this file.

Employer DocumentsEmployer documents like your Form W-2 should go right into the folder as soon as you get it in your hand. Don’t place it on your desk for later – get it in that file and then you can forget about it until you need it.

Charitable DonationsThese could include donations that were goods or cash (meaning credit card, check, or cash with a valid receipt). Did you contribute to your daughter’s charity bike ride or donate stacks of gently worn clothes to a charity? Make sure every receipt is in the folder so you can claim your donations as a tax deduction. Believe it or not, those small donations add up quickly over the course of a year.

Mileage – If you volunteer for a charity, you can take the mileage you drive (although not the hours you worked) while volunteering as a tax deduction. Keep notes of your miles with the dates, times, and purpose so you can claim it come tax season.

Invoices for Side Work Projects – Did you edit a journal article? Did you moonlight as a caregiver for a few months? You still need to claim the income you earned. If it was below $600, you won’t get a Form W-2 from your employer, but you still have to claim your earnings on your personal income tax return (generally it’s claimed under “other income”). Keep your paycheck stubs for reference.

Check Last Year’s Return

If things remained pretty much the same this year as last year, check over your income tax return from last year. Compare what you had to what you have now to make sure you aren’t forgetting or omitting anything.

Keep Track of Deadlines

Lastly take a few minutes to mark down important dates. You’ll need all your interest statements and income tax statements by January 31, 2015. The last date to file your taxes is April 15, 2015.

Getting started now means you’ll feel less pressure later. The best part is that you don’t have to do everything all at once. Check off one or two tasks a week and pretty soon, you’ll be ready for tax time.

Why It Matters If You’re an Independent Contractor or an Employee

Why It Matters If You’re an Independent Contractor or an Employee

One of the best perks of being a nurse is the flexibility that can come with the job. Throughout their careers and as their own personal needs change, nurses are able to change their schedules more easily than most other professions. With positions as a per diem nurse, an on-call nurse, a part timer, or a full timer, there is often a way for a nurse to fit his or her hours around lifestyle and financial needs.

But with the flexibility comes other responsibilities. Some part-time jobs and jobs that are purely contractual offer nurses the choice to work as an independent contractor instead of an employee. There are bonuses and drawbacks to both situations.

What is the difference between a nursing employee and one that is an independent contractor? The biggest reason you want to know the difference is really because the IRS has strict classifications for one or another. Based on your classification, you will have different tax process and vastly different tax responsibilities.

Independent contractors are in control of their own schedules and their own work. As an independent contractor, you might bring your own tools and equipment to the job, and you will form your own schedule. Basically, an independent contractor is free to make his or her own rules. Because of that kind of freedom, independent contract positions for nurses aren’t typical unless they’re strictly on an as-needed basis and the nurses are self-employed.

Because the very nature of nursing is based on strict standardized procedures, the IRS and almost all healthcare settings consider nurses employees, not independent contractors. An employee is generally considered to be a nurse who reports to work at the time and day specified, does the work according to the organization’s wishes or rules (for example, you must follow certain procedures in order), and the vast majority of nurses fall into this category. Even if you work for an agency, you should still be considered an employee of the agency and not an independent contractor for the agency.

Why does it matter if you are classified correctly?

As tax day nears, more people start to think about their finances and being accurate really counts. The IRS looks closely at independent contractors, especially those in the medical fields, because they classify most of them as employees (your employer should be withholding your taxes properly) rather than independent contractors (you are considered self employed and must pay your own taxes, including both portions of the FICA taxes and a self-employment tax, correctly and on time).

If you are audited and found to be in noncompliance because your classification is incorrect, you could be subject to some hefty penalties and fees, not to mention owing any back taxes that weren’t paid properly.

The freedom that comes with independent contract work is nice, but independent contractors pay more money in taxes and are responsible for filing and paying estimated quarterly taxes. They also don’t receive employee benefits like health insurance, paid time off, or workers’ compensation coverage.

How can you tell your classification? An employer is required to give you a Form W-4 so you can select your withholding amounts upon being hired. Your pay stub will also reveal what taxes were being withheld and how much. In the beginning of the year, your employer will send you a Form W-2 to file your personal income taxes. If you haven’t received these (or if you’ve been told to just file a 1099 self employment tax form), check with your employer to make sure your classification is correct.

In the end, you are responsible for the taxes, so you want to make sure you protect yourself.



Get a Jump-start on Tax Season

Get a Jump-start on Tax Season

Although the deadline to file your taxes isn’t until April 15th you should prepare early. Preparing early can alleviate stress and potentially get you more of a tax refund when you file.

Employers are required by law to send out W-2 and 1099 forms by January 31st of each year. Take the next few weeks to organize your tax documents to make it easier when you do decide to file. 

Here are a few tips I’ve learned over the past few years that save me time and help maximize my tax return: 

  1. Make a list. Make a list of any anticipated deductions you had over the past year and would like to discuss with your accountant. Try to be as through as possible. Review these deductions with your accountant. If you have a good accountant he or she may find deductions you may have overlooked.
  2. Gather all documentation. Find relevant documentation of anticipated deductions and place them in a manila envelope, separated by paper clips. Relevant documentation may be receipts, W-2 forms, interest payment statements, etc. Your accountant will love you for being so organized!
  3. Use your bank to your advantage. Some banks have an “end-of-year statement” listing all of your purchases in specific categories like home, food, and car expenses over the previous year. Use these statements to save even more time when organizing your tax documents.
  4. Get documents early online. Some companies allow you to get your W-2 forms or interest payment statements online. This means the statements may be available earlier than January 31st.
  5. Spend wisely. Use your tax return wisely if you are entitled to one. Some may see income tax time as a spending holiday, but it would be wise to budget this money and pay down any debt you may have before blowing through your refund. Think of you refund money as a bonus. Divide your money between spending as you choose, saving, and paying down debt.

I hope these tips help you as much as they help me each year.

Do you have any specific tax refund tips? Comment below and share them with us!

In addition to working as a RN, Nachole Johnson is a freelance copywriter and an author with her first book, You’re a Nurse and Want to Start Your Own Business? The Complete Guide, available on Amazon. Visit her ReNursing blog at