Tips That Make Tax Season Easier April 15 is not that far away, time to gather your receipts, pay stubs, bills and W2 forms. As the tax return filing stealthily approaches, anxiety over filing our taxes is a certainty in all our lives.Get this years papers in order before you are looking at next year. Here is my annual list of ten tips to alleviate these tax time headaches. 1. Create a Checklist: Make a list of everything you need to effectively complete your taxes. Your list should consist of such categories as deductions, business expenses, receipts, W2 forms and any changes made in the tax code from the previous year. Make sure it reflects your spending habits . 2. Begin Tax Preparation Early: At the beginning of each new year, get an expandable folder. Label each pocket according to what is in it receipts, W2s, pay stubs, business expenses, home expenses and other important documents. Pendaflex has a great solution with their Tax Box, it is a perfect tool for filing your tax time records since it comes complete with hanging folders, file folders, index cards, check file and a project organizer inside its own plastic box. 3. Sort as You Go: File your papers in their respective pockets as you get them. If you organize your papers as you go, the task of doing your taxes will be much simpler. If everything is in its respective pocket, everything will be where you need it when April rolls around . 4. Remember Real Estate: Keep all statements from the county or state, and all cancelled checks for real estate taxes in a separate folder pocket I recommend keeping all statements that the bank sends to you at the end of the year together with any statements of mortgage interest or real estate taxes they may pay for you in one folder, and label it Real Estate. If you closed on a house in the past year you would want to keep any papers or receipts with regard to mortgage, interest, points etc. in the same pocket . 5. Keep a Business Diary: Keep written documentation of all of your business costs. A great suggestion write all of your business expenses in a small notebook. At the end of the year, put it in the pocket with your business receipts. This will make the task of auditing your business trouble-free. 6. Journal Home Office Expenses: If you have a home office, keep track of all expenses related to this office office. This journal of expenses should be separate from your other business expenses, and should include telephone, fax, heat and electricity costs . 7. Keep Track of Charity: Keep all of your receipts together from any charitable contributions during the year Designate a separate folder pocket in your expandable file or file drawer for charitable contributions and string all receipts from fund-raising activities, youth groups, religious organizations, financial donations or clothing donations. 8. Take Advantage of Resources: The IRS web site provides forms, instructions and other materials. There is nothing more exasperating than having completed your entire return except for that one form that you forgot at the office , so using this resource can be helpful in retrieving needed forms . Taxpayers can access forms, instructions and other materials using the IRS own web site at www.irs.ustreas.gov. 9. Consider Filing Electronically. Electronic filings are becoming more popular as taxpayers become more comfortable using the Internet. It is less likely that your return will be lost or replaced when you file electronically, and your paperwork is significantly cut down. Additionally, taxpayers who are due tax refunds from the IRS will generally get their refund checks sooner using electronic filing. 10. Store for Future Reference: After filing your taxes, keep a copy in the folder with the receipts, W2s and other important documents. Shut the folder and keep it in a safe place. If in the future you need to refer back to your tax returns, everything youll need will be at your fingertips . Keeping your financial documents in good order throughout the year will make filing your taxes much easier and less stressful. |
