The deadline for most companies and organizations to get out their tax statements to employees and clients was January 31st. So, you’ve likely been receiving important documents in the mail or at least have access to them online.
While you still have a couple of months to get with your accountant or log into a tax preparation service to file taxes, now is the time to get organized and make a plan.
Make a Tax Plan
It’s essential to know the deadlines for tax preparation and filing. Write these on your calendar as there could be penalties for missing deadlines.
- Tax Day is generally April 15th (In 2022, the 15th falls on a holiday weekend, so the date was extended to April 18th.)
- If you are working with an accountant, know their deadlines. Tax season is hectic for these professionals, so make sure you schedule an appointment early and give them plenty of time to produce accurate returns.
- Self-employed individuals, business owners, and retirees may need to file quarterly tax returns. Ensure you know those dates and have the coupons ready to mail in if needed (or know how to file and pay electronically).
- Depending on your method of filing paperwork, set aside time each month to file documents electronically or in a folder. If you haven’t already done so, make notes on receipts to remind you of the expense.
- In January, decide on a tracking and storing method for the new year’s documents and start or continue gathering last year’s documents for filing.
Gather Tax-Related Documents
Ideally, throughout the year, you’ve kept receipts that you might be able to deduct on your returns. If you have a small business, you kept a ledger on the computer or on paper with expenses and income. You’ve kept a copy of your bank and brokerage statements in one place. If not, you’ve got a big task ahead of you,sifting through piles of papers.
If getting ready for tax preparation involves more than just pulling out a folder or printing a few documents, there is a better way. A dedicated accordion file, basket, box, folder in the file cabinet, or a file on your computer will make things muchmore manageable.
What is important is finding a method that works for YOU.
Keep Electronic Files
If you do not want to see or deal with paper, consider either scanning or taking a photograph of your receipts and keeping the pictures in a file on your computer. (There are scanner apps for your phone, so this does not involve buying another piece of equipment.) You can also keep electronic bank or brokerage statements in this file as well. When tax season comes along, check with your accountant or preparer to see if they take electronic files. If not, you might need to download and print them off, but they will at least be in one place.
Note: Make sure that you store your files in a secure place on the cloud, download the folder periodically to a zip drive, or backup your files in some other way. If your computer decides to have a glitch, you don’t want to lose all your documents.
Use A File Folder or Basket
If you feel more secure having your files in paper form, dedicate a spot in your file cabinet, box, or basket in a convenient spot for papers. As you go through your mail, clean your wallet out, or reconcile your bank account at the end of the month, simply drop the documents that you might need for taxes in the container. You could combine the two methods by dropping paperwork in the basket and then filing them in folders in the cabinet (or scanning them into a digital file) weekly or monthly.
Place this folder or basket in a convenient spot, such as a shelf in the kitchen where mail is sorted or in your home office.
After Taxes are Filed
Once your taxes are filed, you still have a little bit of work to do. Place your filed documents, receipts, and statements in an out-of-the-way place, but do not discard them. If there are papers that you saved but didn’t need (and don’t need to keep them for other purposes), shred these to protect yourselffrom identity theft.
The rest of the documents need to be kept for a period of time. See the IRS website for more information.Also keep them just in case they are required for an audit, to file next year’s return, or if you need to amend a return for some reason.
Need Help Organizing?
It might surprise you, but professional organizers can also help with tax season. They can help you devise the method and place for keeping paperwork, set a schedule for filing, assist you in gathering needed documents, and more.
At Totally Organized, we can incorporate a method that works for you and your lifestyle. Whether you are a business owner, employee, or self-employed, we willcreate a system to get – and keep – you organized for tax season. Call us today for a free quote!