Now Is the Time to Organize Your Taxes
Now is the time to get organized. With tax time just around the corner, getting your taxes organized should be at the top of your “to do list.” Every year, no matter how prepared you may think you are, the process still seems daunting. Here’s some help.
With tax season just around the corner, getting your taxes organized should be at the top of your “to do list.” Every year, no matter how prepared you may think you are, the process still seems chaotic. When Christmas is over and packed away, it’s hard to think about tackling another project but this is actually the perfect time to organize your taxes. It really doesn’t take much time to complete the process if you already have your receipts organized in categories.
Start out by purchasing a spiral notebook and take these steps:
1. At the top of each page, write the category: examples include “mortgage interest” or “property taxes.” Add together all the figures at the bottom of each page.
2. Label individual manila envelopes and put each category of receipts in the corresponding envelope to better organize your taxes. Having the receipts sorted and individually packaged will be a convenience if you should need to review the records in the future. Keep the envelopes within easy access to allow for adding any tax records yet to come, like your earned income or interest income. Some companies send these later than others. Charitable institutions are notoriously late to send out their records. Having the available information already accounted for will be a comforting thought when it’s time to go to your tax consultant, and especially if you prepare your taxes yourself.
3. When you have completed your tax return, pack the envelopes in a portable file folder or a cardboard box that can be packed away after taxes are filed for the year. (The best solution is to pick an area in your home, such as a closet or cubby, where you would store only tax information.) Before packing the information away, write in bold letters the content and the date on the outside of the container. Don’t just write this information on the top of the container but the sides as well. This way, should you need to review any information from that year’s tax preparation, it will be easy to identify from other storage boxes. Whether it’s a question of yours or the IRS, you will be prepared.