Unfortunately, if you’re just now thinking about your taxes and starting to look at your records, there’s not much else you can do to make that information easier to organize at this point other than plow through it. However, as you’re filling out your tax preparation checklist, it’s a great time to think about next year’s taxes and begin creating a filing system that does the work for you.
A Personalized Filing System
Whether you use an accordion file, hanging file folders or another folder system, the key is to figure out which categories you need and file the information as it comes in so that it’s ready when next year’s tax season rolls around.
For example, you might have a folder for W-9s and other income records, another for medical expenses, a third for charitable giving and so on. Depending on how complicated your finances are, you may need to divide some of your categories into subcategories, or you may find that broad categories works best.
Be sure to stick a copy of this year’s return in the file as well for easy reference.
I don’t know about you, but every year as I begin to prepare my taxes, I have to find our social security numbers, either from the place where I file our cards or from last year’s taxes. While I know mine and my husband’s, I haven’t even tried to memorize our girls’, and so that is always the first step.
What I plan to do this year is to actually make myself a cheat sheet that I can print and put with the tax records I’m filing for this year. I’ll include our social security numbers, IRS address, etc. just to eliminate one step and simplify the process next year.
Do you have a filing system specifically geared to make tax preparation easier? Is there one piece of information you end up searching for every year?