How To Best Prepare For Tax Season: Facts And Tips
This time of year can be particularly taxing – make it easier with some of these helpful tax tips.
Dig up all of your receipts. Whether it’s a business transaction, major purchase, charitable contribution or other notable transaction, these receipts could lead to deductions. Here’s a list of tax deductions for you to reference.
Some of these transactions may have occurred online so remember to search for receipts in your email.
For receipts that are not online, consider scanning them onto your computer to minimize the risk of losing them or having the ink fade away. Make a note on the receipt so you know exactly what type of expense it was. Store them in the cloud in case your computer crashes and you no longer have access to your files.
Organize by year. If you find yourself with years of tax documents, those do not have to take up room in your main filing system. Feel free to keep them in a safe place, separate from your current year and the prior year. Keep in mind that the suggested length of time to keep your documents is 7 years.
Create a system. While you’re in the process of gathering all of your tax documents, now is a good time to create a system to keep track of all the important supporting documents that you’ll need each year. Use labeled folders with designated categories to easily find what you need during tax season. Here’s a helpful list of the documents you should have handy. The IRS also provides a great checklist to use when preparing your taxes.
Feeling Tech-Savvy. There are a slew of apps that can help you track your expenses throughout the year, making it easier to organize them for tax season. Mint.com is one of our favorite ways to track expenses and create budgets for each category to help us reign in spending.
Reflection. Once you have all of your taxes done, take note on what worked and didn’t work for your tax organizing system this year. Keep this in mind when you begin to create a system for next year. One positive thing about organizing taxes is you always have another opportunity to get more organized for the next year.
We know organizing paperwork and tax documents can be a tedious, stressful and often boring task, but when you have it organized, you can make the whole process much more efficient. May this be the beginning of a positive tax experience!