We just finished our taxes about a week ago. My husband flew all the way to Texas to get them done because we absolutely love, love, love our “Tax Lady.” Yes….that’s what she goes by…it’s even on her business cards! Well, my husband actually had other business in Texas so he thought he’d get them done during his trip. Anyhoos….I digress.
The purpose of today’s post is to gently remind you that it is the season. I’m sure most of you have already gotten your taxes done, but some of you may still need a little prodding. So I thought I’d share a couple of quick tips on how to get organized for taxes and to suggest a couple of products that I found very useful that just might make tax season a little more “simplifized” for the upcoming years.
First, let’s talk about what items you need (you should also go to www.irs.gov for more information):
1. Last Year’s Tax Return. I suggest pulling this out first to use as a guide for the current year’s return (you do have a copy of it right? FYI…you should keep at least the last 7 years of tax returns).
2. Income documents:
Proof of jury duty pay
Proof of alimony you received
Social Security statement (1099-SSA)
Dividend and interest statements (1099-DIV and 1099-INT)
Retirement distributions (1099-R)
Brokerage statements (1099-B), along with statements showing when you bought and sold your investments
K-1 statements reporting profits from partnerships, trusts, and small businesses,
Record of income and expenses for your rental property
Record of income and expenses for your self-employment
3. Other tax documents:
HUD-1 Escrow statement for property you bought or sold,
Summary of moving expenses,
Summary of educational expenses (college tuition),
Summary of your child care, day care, or adult day care expenses,
IRA contributions (traditional, SEP, or rollovers)
Student loan interest paid (1098-E)
4. Tax deduction documents:
Health care expenses (doctors, dentists, health insurance, eyecare, medicine)
Real estate taxes
Motor vehicle registration
Mortgage interest paid (1098)
Gifts to charity
Last year’s tax preparation fees
Job-related expenses (union dues, job education, uniforms)
Loss of property due to casualty or theft
Ok, so now that you’ve got all of your documents I suggest compiling them into a nifty folder to keep them organized. Whether you’re doing taxes yourself, online, or visiting a tax attorney having your documents organized will help keep the process flowing. I used a new folder this year and I found it to be very beneficial. It’s called the Smead Tax Organizer (item no: 89202). It has six pockets, simple instructions and checklist on the inside front cover, printed labels and blank labels. Since it only has 6 folders, I doubled-up my folders and put two labels on each one give me more categories. I got mine from a fellow organizer but you can find them at the company’s website: www.smead.com.
Another system that I discovered is the Freedom Filer (I’ll go into more detail on this system in a future post since it’s designed to organize all of your personal papers and not just taxes). What’s great about this system is that it helps you identify, label and organize your tax documents and creates a rotating system of maintaining previous years’ returns. Before, I used to store all my tax receipts in one spot and all my documents in a catch-all folder. Although I thought I was organized, I ended up spending a few hours just sorting through the receipts to determine what type of expense / write-off it was. With the Freedom Filer, I now file each of my receipts and documents in it’s proper category so when tax season comes they’re all ready categorized. I think it’s a really great product.
Hopefully these tips have been helpful and that next year’s and future tax seasons won’t be so daunting.