The IRS deadline for filing personal tax returns just passed. How did you do? Did you have them done well in advance and said “no big deal”? Did you scramble, bring it down to the wire and get them mailed off that day? Did you decide to file an extention because you weren’t able to pull it together in time? Either way, we have some tips to make next Tax Season that much smoother.
Collect, file, record and label tax related paperwork throughout the year to save time and stress when it comes time to prepare your tax returns (or to save money if you have a CPA prepare them for you):
1. Have a place and a system for collecting and sorting tax related documents as they come in during the year.
2. Consider what you’ll need by reviewing your past years’ returns.
3. Categorize and label folders with the type of income, deduction or expense. You can create custom labels with a label maker (like one of Dymo’s) or consider a product like the FreedomFiler that has pre-printed labels ready to go.
Stay organized by discarding things you don’t need, archiving for storage that which you do but won’t access often and having handy the files that you’ll add to periodically during the year.
1. Understand document retention. Ask your CPA for guidance on what to keep, and for how long. Though we’re not accountants or lawyers, we have prepared a Document Retention Guidelines sheet that we share with clients. If you are a Simply Placed client and don’t have this reference guide, please reach out to us and we’ll send it to you right away.
2. Get rid of paper you don’t need. Keep tax related documents separate from paperwork not related to taxes.
3. Box up and archive past years’ taxes. Especially if you have a limited amount of space in your home office, know that you don’t have to keep past years’ documents right there. Chances are (fingers crossed), you won’t have to access these items very frequently. Box them up, label the contents and store them someplace safe, but not necessarily in your primary office or living space. Up high in a closet, in a garage that is both secure and unaffected by the elements, or in a dry basement would all be ideas. Again, a label maker can be a handy tool here!
4. File your return once you’ve filed your return – I mean phyically file the return itself and back up documentation. If you have paper copies of these things, file them in your file drawer, well labeled. At that time, consider if there is anything (past years’ taxes) that should come out and be boxed up and labeled for archiving (see previous tip).
Hopefully these tips will make for smooth sailing and low stress as you think about collecting, categorizing, archiving and labeling your tax records throughout the year and in preparation for your next round of tax return preparation.
Let us know what else you do to simplify your tax life. We’d love to hear from you.
Disclosure: This is sponsored content and we have been given nominal gift in recognition of our time to do this post. That being said, we do not blog about anything we do not believe in and Dymo did not edit our post or direct our content in any way.