You sit down to pay your taxes, and the stack of receipts and paperwork beside you topples to the floor. You begin filling out the paperwork and forms, only to realize you’re missing information. Or you get an angry phone call from your accountant who isn’t accepting your shoebox full of receipts any more.
Sound familiar? This is the reality for millions of people every April. The “why worry about it now?” mentality takes over the other eleven months of the year. Then come April you just want to kick yourself. Whether you’re somewhat organized or your papers are a complete mess, these tips and steps will help you get through your taxes with as little pain and stress as possible.
===>> Gather Your ID Numbers
Keep your tax identification numbers, social security numbers, and social security cards, in a safe place and keep them all together. You’ll need the social security numbers for all of your dependants as well as yourself, and your spouse if you’re married. When you’re filling out your tax forms you won’t have to hunt for this information.
===>> Gather Your Income Forms and Statements
If you’re employed then you’ll want to gather your w-2 forms from the past year. If you’re self-employed, you’ll want to run reports that display your profits, expenses, and income for the past year. You’ll also want to have last year’s tax forms at the ready. This is particularly useful if you are having an accountant file your taxes this year or you’re using a software program to determine your taxes and file them.
You’ll also want to gather all the forms from your various assets and investments. For example, if you own a home you’ll receive a statement from the bank that owns your loan. If you own stock you’ll receive a form from your broker. If you have any type of retirement or investment account, you’ll receive a statement from the financial institution holding those accounts. These forms will outline the money you’ve earned, or lost, for the year. You’ll also receive statements from organizations you’ve donated money to.
===>> Gather Your Receipts
You don’t need to keep every single receipt you had for the entire year. The receipts that are important are the ones that are related to your medical expenses, your childcare expenses, your business expenses and so on. If it’s related to a potential deduction then keep the receipt.
That’s it. With this information you should be able to sit down and finish your taxes in just a few short hours. Organization saves time and stress, and it ensures you have all the information you need to do your taxes correctly.