Last week, I shared some tips to make organizing and filing your taxes easier. Today, I’ll share a few tips that will make doing next year’s taxes even easier, because now is a great time to get started on next year’s tax return.
- Designate a place for tax documents. Tax documents come in all year long, not just in January. You’ll have paystubs, receipts for tax-deductible donations and tax-deductible expenses, random income statements, and other miscellaneous documents. It’s nice to have one central place where you collect all of those documents throughout the year.
I use an expandable pocket file similar to this one to collect my tax-related documents throughout the year – I separate the documents by category so that part is already done when filing season rolls around. In fact, I have two folders, so that I can start collecting the next year’s papers while I’m still gathering documents for the current return.
- Keep a “Taxes” folder on your computer and save important documents in it. For example, I itemize non-cash donations in a spreadsheet, and save that spreadsheet in my computer. I also take photos of the items I’m donating, and put them in the same folder on my computer. I don’t always remember, but I try to print out a copy of the spreadsheet and staple it to the receipt from company I donated the items to, which makes things easy when I am giving all of my documents to our accountant.
- Check your Flexible Account Spending several times during the year. FSAs are a fabulous tax benefit, but you forfeit your contributions if you don’t use them. Checking on the account throughout the year ensures that you spend all of the money instead of losing it.
- Track amounts throughout the year. If you find yourself gathering information from multiple sources each year, consider tracking that info in a spreadsheet throughout the year so you don’t have to do it all at once. For example, my blog income comes from many different sources, and on a variable basis. I’ve found that tracking my income as it comes in is far easier than aggregating that information once a year.
It doesn’t take much effort to put these tips into practice, and you’ll be so glad you did when next year’s tax season arrives!
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