As important tax documents start filling mailboxes and inboxes, one question comes up every year: How can you make tax preparation smoother, faster, and less stressful?
The answer starts with organization. Whether you prepare your own return or work with a CPA, having your personal tax records properly sorted can save time, reduce errors, and help ensure nothing gets overlooked.
Use the tips below to organize your tax records efficiently and confidently.
It seems obvious and simple, but how often have you found yourself going through piles of paper looking for that elusive 1099 tax form or charitable deduction receipt? Choose one physical folder, envelope, binder or digital folder and commit to putting everything tax-related in that location. That includes W-2s, 1099s, receipts, and even financial documents you’re unsure about.
If you only do one thing to prepare for tax season, make it this one.
When you have everything all together, the best practice is to sort your information into the same categories used in your tax return. At a minimum, sort the information into the basic categories below. If you have a lot of one category, sort that stack into the following sub-categories.
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Alloy Silverstein’s Tax Prep Checklist
Tax Documentation Categories:
Gather income and expense records for each:
Certain new tax laws may require additional documentation this tax season.
There may be things you receive that you aren’t certain about needing for tax filing purposes. These questionable items and statements should be gathered in one place for review.
Note: Remember, this list is not all-inclusive. It is here to help you sort your information into a usable form to make tax filing easier.
Once your documents have been categorized, create a summary of the information. This summary can be a printed copy of an organizer or it could be a simple recap you create.
Alloy Silverstein’s clients can opt in to an electronic organizer to help streamline this step. Contact your CPA for more details.
Pull out last year’s tax return and create a list of either things you needed last year or glance at your income sources, deductions, and credits. Now use this as a checklist against this year’s folder of information. While this process will not identify new items, it will help catch missing records that qualified in prior years.
Some deductions require substantiation or logs to qualify your expense. Common areas include:
These logs should be maintained throughout the year, but now is a good time to make sure they are complete and ready for tax filing.
With so many types of income, deductions, and credits, it’s easy to overlook something important. Following these steps reduces that risk, speeds up preparation, and helps ensure your return is accurate and complete.
A little organization now can save you significant time — and stress — later.
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