Organizing For Next Year's Tax Season
It’s personal tax week in the United States and there’s a good chance you’re scrambling through piles of papers to find everything you need to get them filed on time.
Or, if you already filed them or submitted them to your accountant, it’s probable that you were really stressed about the process.
It doesn’t have to be that way next year. With a little bit of planning, some organizational setup right now, and intentionality throughout the year, you can cruise through next tax season with ease!
Step 1: Make a List
Start off by making a list of all the documents you needed in order to submit your taxes this year. Common items include W-4’s, mortgage interest statements, medical receipts, and business expense receipts.
Step 2: Label Folders and Envelopes
Create a folder labeled ‘Taxes’ and the current year (the next set of taxes you have to file). If you have complicated taxes or business documentation due to a sole proprietorship you may need to set up a couple of files (i.e. ‘Personal Taxes’ and ‘Business Taxes’). If you have paper receipts, make an envelope labeled with ‘Receipts’ and the current year.
Step 3: Affix Your List
Take the list that you created in step 1 and affix the list to the inside of your folder. If you have more than 1 folder you’ll want to split the list up so that the appropriate items are in the appropriate folder. Having the list in the folder will make it easy to check items off as you verify that you have everything you need next April.
Step 4: Make it Accessible
Put the folder(s) and/or envelope(s) in a place that is easily accessible on a regular basis. They could be in vertical file sorter on your desk, if you have the room, or in your file cabinet. Another alternative is a portable file box.
Step 5: Go Digital
These days there are lots of documents and receipts that are delivered digitally. Set up computer files that mirror your physical file(s) and envelope(s) with ‘Taxes’ and the current tax year as the parent folder. Type your list into a text document or scan the hand-written one into the appropriate digital folder.
Step 6: Regular Filing
Now for the challenging part. As you receive documents that may be used to file your taxes next year, put things in the folder(s)/envelope(s) you created. As digital documents come in, drop them into the appropriate digital folders or print them to put in the physical ones.
Steps 1-5 should take less than an hour if you do them now. Yes, I suggest you do them now. Not next week or next month. Don’t put it off or it likely won’t get done and you’ll find yourself in frustration all over again next year!
Step 6 will be tempting not to do in the moment, but try to remind yourself that it will take seconds to do as they come and will save you hours of time and unmeasurable frustration a year from now.
Tax season can be stressful for many reasons but finding your documents doesn’t have to be one of them. Follow these steps and you’ll be amazed how much time and energy you’ll have a year from now.
