Good habits can make tax time less taxing, according to David Crumbaugh, a certified public accountant and principal of Valentine & Associates CPAs. Crumbaugh, who has more than 30 years’ experience working with REALTORS®, shares these tips:

Save receipts

“The IRS is clear. You must report every dollar of income earned, and you must document any dollar of expense you claim. So, you want to make sure you have documentation.” That means saving or scanning the actual receipts, he says. Credit card statements aren’t sufficient, because they don’t show what you bought and how you used it for your business.

Keep a mileage log

“Mileage is the number one expense that most agents will take, and it is one of the most under-documented expenses,” he says. “The rule that the IRS has is very specific: You must keep a mileage log if you are deducting auto expenses.” Whether you use a pen-and-paper record or an electronic one, be detailed with your entries. “Add in who you met with and the business purpose of the meeting, so you have the complete log that would pass the IRS test. Make that part of your daily habit.”

Use a separate bank account for taxes

“The best practice I suggest is that when you get your commission, take 25% right off the bat and put it into a savings account that you don’t touch. That becomes your tax account,” Crumbaugh says. “That way there are no surprises. If you have a decent year and you owe a bunch of tax, you’ve got the money right there, because you tucked it away.”

Set up a system you will use

“Your system just needs to work for you.” You could use an app on your phone, software or spreadsheets on a computer, or pencil and paper. What matters isn’t what a system looks like; it’s what it does. “You must meet three criteria to maintain a good set of accounting records: You have to be able to run your business off of the records, your tax professional must be able to prepare a tax return, and the appropriate government agency has to be able to audit those records.”

Schedule blocks of time

“Set aside a couple of hours a week to update your bookkeeping.” Make sure your mileage log is up to date, document your expenses, and make sure your records show enough detail. You might consider forming a monthly habit of producing a profit-and-loss statement, so you can see how your income and expenses line up. “You’ll know where you stand, and you can make better decisions.”

Work with a professional

Like REALTORS®, CPAs adhere to a code of ethics and take continuing education courses. “That designation comes with a lot of responsibility to stand behind our work,” Crumbaugh says. He likes consulting with agents from the beginning of their careers to help them start off on the right foot but says that people know when they can best use tax planning advice. “A lot of times, I get a phone call from a seasoned agent who just got their broker license, and now they’re opening their own brokerage and want to discuss all the things that go into that.”

Start now

“Don’t wait till the end of the year.” Some opportunities are only open during the tax year itself, not early the next year when you are preparing your return. “If you miss that deadline, you may miss a golden tax planning opportunity.”