Organizing for Tax Time
Preparing for tax time can be stressful -- but there’s hope!
Decide if you will be preparing your taxes, or whether you will be having them prepared professionally. Make a list of the documents you will need, including W2s, bank statements, etc. With a checklist, you’ll know if any important information is missing when it’s time to begin your tax preparation.
Plan in advance. If your past system has been to toss all your tax related receipts and statements into a shoe box, it is now time to gather and sort your documentation. This will save you lots of time and stress when you or a professional are actually preparing your taxes.
Record your expenses. If you don’t have an organized way of keeping track of your deductible expenses, you may be missing out on big savings come tax time. Create a list of your expense categories using a simple list, a ledger, or a computer-based system. That way, if you ever were to get audited, all your information will be safely stored in one place.
Keep everything together. Scattered receipts and expense papers, such as medical expense documentation, can lead to lost deductions -- and lost money. Instead of losing track of your receipts or keeping them in a shoe box, purchase an inexpensive accordion folder. Label the folder’s slots with your expense categories, and as you get a receipt, drop it into the corresponding slot. Totaling your expenses for each category at tax time will be a breeze!What about next year? Don’t wait until next year’s tax time rolls around to start thinking about your 2019 taxes. Start using your new, more organized strategy for keeping track of your receipts and expenses now! Staying on top of receipts and expenses throughout the year can eliminate tax-prep related stress.