Taxes, taxes, taxes…Fun times are ahead. With the tax deadline rapidly approaching, some people are scrambling. Scrambling to find receipts and scrambling to organize them. We suggest the following to make tax time a little more manageable. Even if your receipts and important papers are not organized, be mindful of the ones that you need instead of scrounging for everything.

The basic records that most people will need include, in addition to the previous year’s return include:

  • Income –W-2 forms, 1099 forms, bank statements, brokerage statements, K-1 forms, interest, social security benefits, unemployment, rental income, IRA/pension distributions, etc.
  • Expenses – sales slips, invoices, receipts, cancelled checks, receipts from qualified charities
  • Home – closing statements, purchase and sales invoices, proof of payment, insurance records, receipts for improvement costs
  • Investments – brokerage statements, mutual statements, 1099 forms, 2439 forms

In order to make the process easier for yourself and your tax preparer, separate the papers into different categories.  Use the list above as a guideline. Even if you haven’t yet gotten everything together it would be advantageous to make your appointment anyway. This gives you a deadline which will push you to work on it sooner rather than later and not have to wait until the last minute.  

For others, the following information may be needed. Those specific records might include:

  • Alimony – whether you pay or receive
  • Business use of home
  • Casualty and Theft Losses
  • Child Care Credit
  • Contributions
  • Credit for the elderly or the disabled
  • Education Expenses
  • Exemptions
  • Employee Business Expenses
  • Energy Incentives
  • Gambling Winnings and Losses
  • Health Savings Account and Medical Savings Account
  • Medical and Dental Expenses
  • Mortgage Interest
  • Moving Expenses
  • Pension and Annuities
  • Taxes
  • Sales Tax on Vehicles
  • Tips

For more information you can always check the IRS website.

If you are one of the many that has waited to the last minute the above steps will help you this year. In order to be prepared for next year here are a few tips for keeping your papers organized. For personal returns there are notebooks that you can purchase where you can keep track of your monthly expenses and pockets to put those bills in by the month. I find these books much easier to use than a file cabinet.  Some even come with extra blank pockets where you can file donations, write-offs, receipts, etc.

For businesses, it is easy enough to keep any receipts that will be used as a write-off in a separate folder. While it may be accounted for in Quickbooks or Outright or whatever bookkeeping program you are using, you still need the hardcopy as a backup.

Instead of letting the receipts and paperwork pile up, either file or scan them right away or pick one day a week to do the filing. Even 15 minutes a day will keep the paperwork manageable so that it doesn’t become overwhelming. Whichever works best for you is what you should choose. Nonetheless some people continue to procrastinate because the paperwork is so unorganized and so overwhelming they don’t know where to begin. They may even need extensions because there is no organized method which can end up costing the client money. If that is true for you, you might need the assistance of a professional. In other words, to quote Nike, “Just Do It.”

April 15th is almost here!


Book a phone consult!

so take that first step