This post may contain affiliate links, which means I’ll receive a commission if you purchase through my links, at no extra cost to you. Read my full disclosure for more information.
Is this you? You sit down to pay your taxes, and the stack of receipts and paperwork beside you falls to the floor. You begin filling out the paperwork and forms, whether by hand or online, only to realize you’re missing information. Or you get a phone call from your accountant who isn’t accepting your shoe box full of receipts anymore and now you have to start organizing the big mess!
Does any of this sound familiar? This is the reality for millions of people every April. The “why worry about it now?” mentality takes over the other eleven months of the year. Then come April you just want to kick yourself. Whether you’re somewhat organized or your papers are a complete mess, these tips and steps will help you get through your taxes with as little pain and stress as possible.
1. Gather Your ID Numbers -Keep your tax identification numbers, social security numbers, and social security cards, in a safe place and keep them all together. You’ll need the social security numbers for all of your dependents as well as yourself, and your spouse if you’re married. When you’re filling out your tax forms you won’t have to hunt for this information.
2. Gather Your Income Forms and Statements-If you’re employed then you’ll want to gather your w-2 forms from the past year. If you’re self-employed, you’ll want to run reports that display your profits, expenses, and income for the past year. You’ll also want to have last year’s tax forms at the ready. This is particularly useful if you are having an accountant file your taxes this year or you’re using a software program to determine your taxes and file them.
What I like to do is use the same system each year and have it pull data from last year, it saves tons of time! You can use H&R Block online, TurboTax etc
You’ll also want to gather all the forms from your various assets and investments.
Own a home? You’ll receive a statement from the bank that owns your loan.
Own stock? You’ll receive a form from your broker.
If you have any type of retirement or investment account, you’ll receive a statement from the financial institution holding those accounts. These forms will outline the money you’ve earned, or lost, for the year.
You’ll also receive statements from organizations you’ve donated money to.
3. Gather Your Receipts-You don’t need to keep every single receipt you had for the entire year. The receipts that are important are the ones that are related to your medical expenses, your childcare expenses, your business expenses and so on. If it’s related to a potential deduction then keep the receipt.
That’s it! With this information you should be able to sit down and finish your taxes in just a few short hours. Organization saves time and stress, and it ensures you have all the information you need to do your taxes correctly.