3 Steps Toward a Smoother Tax Season!
If you're like me, over the last few weeks you've been receiving in both your mail box and your email inbox various documentation necessary to file your taxes. But what do you do with them? Do you throw them on top of the ever-growing stack of mail on your kitchen counter? Do you leave tax-related emails in your inbox? Do you keep putting off scheduling an appointment with your tax -preparer, or doing the taxes yourself, because you know it'll take you hours to scramble around finding all the relevant documents?
If this scenario sounds familiar to you, keep reading. I've got a super-simple way to take the stress out of prepping for your taxes and make the whole process a breeze!
Admittedly, it's too late to help you with filing your 2015 taxes, but you're right on schedule to make filing your 2016 taxes the easiest ever!
Step 1: Create a file folder labeled "2016 Taxes" and place it in your filing cabinet. If you don't have a filing cabinet get a folder or large manila envelope and label it "2016 Taxes". That's it! (I told you this was going to be easy.)
Step 2: Create a folder in your email account called "Taxes". (Are you still with me? Easy, huh?)
Step 3: Create a folder on your computer called "Taxes". Within that folder create sub-folders called "2016", "2017", etc.
1-2-3! In about 10 minutes you just created the tools necessary for an easy as pie tax season for next year.
Of course, tools don't do you any good unless you use them. So, how do you do that?
Throughout the year I want you to place anything having to do with your 2016 taxes in these folders.
For anything that gets mailed to you throughout the year (W-2's, year-end bank/brokerage statements, donation receipts, mortgage statements, property tax statements, car registration receipts, 1099's, receipts for large purchases, etc.) I want you to place in your recently created "2016 Taxes" folder. Even if you normally have a separate file for some of these items, I still want you to place them in this tax folder. You can either make a copy for those files or move the original back to those files after you've completed your taxes. This is a good place to throw any interesting articles you've come across on taxes that you want to readdress when you're doing your taxes. It's also a good place to put any scrap paper with questions/issues that you want to talk to your tax planner about, but that can wait until tax season to do so.
[As an aside, please save year-end statements that show transactions made throughout the year, even if it is a tax-deferred account. I know most institutions make this information available electronically, but they often limit access for a certain amount of years, usually ten. I've come across situations where people need this information from over ten years prior.]
For anything that gets emailed to you throughout the year (correspondence with your tax preparer, notification from financial institutions that your eStatements are available, electronic receipts of donations, etc.) move to your "Taxes" folder. For any tax documents that need to be downloaded, do so now and save them in the "Taxes/2016" folder on your computer. If there's any correspondence that you think you'll need to refer to when you're doing your taxes save that email in this same folder, or print it out and file it with your other hard copies.
Congratulations! You're done!!!
Now, let's travel forward together in time to February 2017 and take a peek as you get all your documents ready to fill out your tax forms...
1. You go to your filing cabinet and take out your "2016 Taxes" folder.
2. You go to your computer and open your "Taxes/2016" folder (or copy the files to a memory stick and place it in your "2016 Taxes" folder to be given to your tax preparer).
3. You go pour your beverage of choice to celebrate a job well done!