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Organizing Tips for Tax Time

Taxes can be a scary time for anyone, whether you are self employed, or an owner of small business, being organized for tax time can really relieve some of the stress.

The following are some great tips for being organized for tax time:
1. Start January 1st. Good tax organization is a year-round process, so keep records, receipts, and everything, and start day one.

2. Use an organizational system: part of being organized for tax time, is starting out organized, get folders, label them with whatever it is you need for tax time, whether that is rental property expenses, or charitable donations.
3. Invest in some computer and tracking software you can use to track everything mentioned in tip 2.
4. Know what is a tax related expense and what isn't. Taking a half hour class on taxes, or spending a few minutes longer with your tax preparer to understand what counts as a tax expense and what doesn't can help you better track your expenses throughout the year. So, know what receipts, whether for business purchases, medical or dental treatment, household expenses, etc. you should keep as a tax related expense.
5. When you receive W-2s, Interest statements, etc. put them all in one place right away. Sometimes it takes a few weeks or even a month to get all of the information you need, and you want to be sure to file it away immediately so you don't lose anything. You will need all these tax related statements whether you use a tax preparer or do your own taxes, so keep track of them.
6. Before you go to the preparer organize your tax information according to specific categories. Think about what is found on a tax return. You will have a section for reporting income, which is where your W2's are used. So, keep all W2's together. You will have a place to itemize, so keep anything you will use as itemizations together. If you are a sole proprietor, and you have business write-off's for a Schedule C then keep all those receipts and bills together. Doing this makes actually filing your taxes fast and efficient and you do not have to wade through a sea of papers to find the ones you need.
7. Get free tax organization materials from the tax preparer, if you do not use one, make your own. For example, if you file your taxes through HR Block and you have a rental property, they will give you a folder with a pocket to put in receipts for maintenance, and a printed log where you can track expenses and depreciation. If you take advantage of these materials you will be sure to utilize any possible write off and not pay more in taxes then you have to.
8. Update. If you switch jobs you want to make sure that your past employers, and even your current employer has a current address for you, so that your W2's get sent to the right place. Trying to track these down can be time consuming, so just keep things updated and you will be good to go.
9. Make a list of who you should get stuff from, and check it off as you receive it. Just knowing what you should have will help you stay organized and think of things you can write off, and use when you file taxes.
10. just be conscious of taxes each year! If you think about it, you are more likely to consciously keep track of things like receipts, pay stubs, charitable donations, etc.

Taxes Taxes
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