9 Simple Ways to Organize Your Tax Information Before Filing

Tax season is a stressful time, but there are ways to alleviate the stress. Organizing eases the stress relating to finding what is necessary to fill out these complicated tax forms. Embrace organization during tax season by following these nine tips immediately. 

Learn the New Tax Rules 

Every year, the tax rules get altered – ranging from filing deadlines to new deductions and exemptions. If it weren’t, new software wouldn’t be necessary every year and those preparing taxes wouldn’t need to learn new information. Know the latest news and changes to remain up-to-date. 

Choose Tax Status 

Decide whether it’s better to go with the standard or itemized deduction. If an itemized deduction is better, gather receipts and documents for business expenses, home improvement, charity donations, medical expenses, uniforms, tax preparation, natural disasters, transportation, and winnings. It will come in handy during a tax audit. Additionally, the tax status may change from last year, so select the correct status (single or married) based on the previous year. Single status branches into single, head of household, or widowed with child. Married people must decide to file jointly or separately. 

Collect Basic Information

Gather income information from W-2s, 1099s, 1098s, PayPal-type accounts, and invoices. Include the family and dependent’s social security numbers, receipts, expenses, financial documents, marriage license, and/or divorce papers in the pile. There’s a chance the IRS will require some information to include with the tax form and not including it will cause delays. 

Store Said Information 

The best way to store hard copy tax-related information is to keep it in a secure area. A portable filing system, accordion folder, file folder, binder with dividers, basket, box, or container placed somewhere in the bedroom or home office will suffice. Digitally scan, photograph, or use a PDF app for an electronic backup copy of everything or print/scan additional hard copies to store in another location. 

File Tax-Related Emails

Should any tax information come through email, do not delete it. Likewise, tax-related info like financial documents and charity donations should not remain in the inbox clumped with new mail. The person could delete the information accidentally. Therefore, create a folder specifically for tax information and transfer the emails there. It’s easier to find during tax season, especially during audits. Download the information and back it up to the cloud and flash drive.

Donate to Retirement Accounts 

Some retirement accounts only account for the amount donated in the past year. Personal IRAs and 401(k) retirement accounts, however, allows deposits until this year’s tax deadline to deduct taxes on this year’s tax return. Learn the contribution limits on the accounts to receive those deductions without penalty. 

Review Last Year’s Tax Return

The tax returns from the previous year give an outline as to what’s changed or stayed the same. Remember the filing strategy, the emotions, and the time frame during filing. Alleviate any problematic or stressful sections from last year by preparing this year.

Gather Finances

Unless there’s a dramatic change, it’s possible to be one of the millions who will pay Uncle Sam their hard-earned cash in taxes. Over-estimate the balance based on last year’s tax return and this year’s earnings. Gather the funds to pay in full or monthly installments to avoid penalties and interest.

Select a Tax Preparation Method

Self-file, a tax preparation company, tax preparation software, a tax accountant, and a tax attorney are five ways to file tax returns. Unless you’re well versed in accounting or taxes, self-filing is not an option. A tax preparation company, accountant, and attorney need advanced notice and/or an appointment so the professional can prepare for the visit.

Don’t wait until the deadline to embrace organization and file taxes. Between the clutter, procrastination, stress, and overwhelming emotion, errors and missing information come with the territory. While it won’t remove all stress, tax organization done throughout the year will make filing taxes easier no matter how long you wait.


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