Get Organized For Tax Season

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Get Organized for Tax Season: Tax Season will be here before you know it, and if you’re organized, preparing your taxes can be a breeze. Here are a few ways that I organize our paperwork throughout the year so I’m ready for April.

UPDATE: This post is from 2012.It’s much easier to use budget tracking software that tracks your spending through your debit card and online bank account. If you’re still using paper, use these tips.

Receipts

I keep all purchase receipts in my wallet. At the end of the week, I record the receipts from any purchases made into categories (groceries, clothing, household, etc.). You can hand write the amounts or enter the data into a spreadsheet or use a free online budget tracking service.

Once I’ve recorded the amounts spent, I write the spending category on the top of the receipts and file them in a business size envelope with the month and year written on the front.

Tax Deductible Items

I label a folder for each of the following items which I keep in the file box pictured above:

Bank Statements– I file the statements from all interest bearing accounts (checking, savings, retirement accounts) in this folder. I group like statements together in order by date and paperclip them.

Medical Expense Records– Anytime we visit the doctor or dentist, I attach the receipt to the statement and file it in order by date. I also make a note of the mileage driven to each location on the statement.

Charitable donations– I keep statements from organizations we’ve given to, as well as the cards from our donations to Good Will. You can also deduct the mileage you drive when volunteering.

Official Forms

At the end of January we receive the 1099-INT forms for our interest bearing accounts and the W-2 from my husband’s employer. I place these in a separate folder along with my husband’s final paycheck stub for the year.

Once we receive the forms from my husband’s employer, I take a few minutes to place all of the previous year’s receipts and folders into a plastic accordian file, which I can just grab when it’s time to have our taxes done–easy peasy!

If you haven’t kept your paperwork organized for the year, don’t despair. Just take a few minutes today to gather your receipts, bank statements and other financial information and place them together in one location. If you want to organize them further, take 10 minutes a day to work on it.

By the way, if you’re expecting a tax refund this year I suggest that you save a large portion of it in your Emergency Fund. It’s really easy to spend all the money if you don’t have a plan ahead of time. 

What’s are your plans for your tax refund? Leave a comment.