Organizing Your Tax Information for Tax Season
Tax time is coming. Some people have been preparing for this moment all year. They have color-coded folders for paper documents, scanned receipts, and organized folders on their computer for digital documents. Everything is all set and all that is left are the W-2s and other final tax documents that will be arriving after the end of the year.
Others know that they should be better organized and make a promise to themselves that they will do better next year. Now, it is time to scramble, but never fear, it can be done. Better late than never. Here are some ideas to get your tax items in order for the year.
Grab Last Year’s Return
This is a great place to start when getting organized because it will alert you to all of the documents and information that you need to find. Plus, if your return includes inventory information or depreciation, you will need the numbers for last year anyway.
Create Organized Areas For Grouping Documents
Everyone’s tax return has a different level of complexity. Those who file using standard deductions without itemizing and no dependents will have the easiest time. It will just be a matter of collecting W-2’s, bank, and investment documents, and anything else applicable to your situation. If your taxes are more complicated and you will be itemizing, your level of organization will need to be more in-depth.
Consider using file folders, boxes, labeled stacks with paperclips, or bins to categorize and organize your documents. Think of each type of document you will need to be collecting. If you have several businesses, be sure to keep each piece of information separately for each business as well.
Once you have an organized place for all of the information, it’s time to start collecting it. Make lists for each category of documents and once you have it filed in the correct place, check it off. Sometimes it will be a matter of finding the information already in your house, while in other instances, it will mean waiting for it to arrive in the mail. No matter the case, once it’s in the correct place, check it off. This will give you some direction when it’s time to go hunting for items as the clock is clicking down on the deadline.
Once you have all of your information in order, it will be a simple task to file your taxes. Whether you work with a tax professional such as https://denvertaxadvisor.com/ or do your taxes yourself, having everything organized will make the process simpler and hopefully mean that you get your return faster. If you are scrambling at the end of the year trying to get everything together, consider putting a better system in place for next year. If you keep all of your items organized as they come in, your life will be much less stressful at tax time.