3 Tips To Get Files Organized For Tax Season And Beyond

Get Organized for Tax Season

Get the paperwork under control and be ready for tax season.

It’s Tax season! For most people, it’s something to look forward to (well the return anyway); but for others, it can be very stressful.

Today I would like to talk about how you can set up your preparation process so you can sail through the tasks year after year.

It’s all about paper management, and we’ve seen it all! From one GIANT folder called miscellaneous, with ALL of someone’s paperwork, to a very detailed filing system. The important part here is to adopt a system that is easy to follow and works for you. That way you will be able to locate the documents when you need them.

Let’s start with sorting the mail!

TIP#1: Sort mail and other paperwork every day. The best place is by the recycling bin. You don’t have to think about or touch it twice. To solve the junk mail problem, unsubscribe from catalogs and other unwanted promotions (same goes for your email as well).

How about if you go paperless with your bills? Some companies offer discounts for online and automatic payments!

Then, pile the papers into these categories:

  • Need Action
  • File
  • Read
  • Pay

TIP#2: But before you put them away – declutter. Shred anything you do not need that has your name, address, SSN, old insurance, etc. Later the shredded paper can be recycled or added to your compost. Yay!

Please note – for tax and audit purposes, you need to save papers from the past seven years.
To take it one step further and greener, you can go all digital on your files! WARNING – you need to be organized with your files there as well.

I am switching to digital files and going paperless for my bills. Running a business requires you to have some documents on paper, but anything that can be kept digitally and not take physical space is going!

Now let’s talk about the actual files!

Depending on your preference and how detailed you want to be, you can start creating a few main categories. Although, I should warn you, if you get into too much detail, you’ll create unnecessary clutter which can be stressful.
The categories are:

  • Financial with subcategories of Tax Returns, Bills, and Contributions/donations
  • Medical
  • House
  • Auto
  • Pet
  • Personal
  • Insurance

Some people like to color code their files, so they don’t have to read the label. It’s almost automated. 😊 I personally like to put the current year along with the category. That way when the next year comes, I create the same folder with the new year and move the old ones to the back of the filing cabinet.

How to get organized for the tax season.

Finally, we are getting to the fun part – getting all the documents needed to do your tax returns!

As I mentioned earlier, everyone has a different style of filing, which is fine. The important part is that YOU can follow the system and find everything you might need — for example, donation receipts, bills that you could expense, W2s, 1099s, etc.

TIP#3: Here you can go about it two ways:

  1. Keep all documents in their folders with the appropriate years, and when it’s time to gather the necessary papers, pull them out. Simple and easy.
  2. You can throw all the tax-related information that you have in one folder and label it “FOR TAXES,” or something similar. That way you know everything is in place. This method works great for people that are very familiar with the tax return process, or they have multiple income streams.

It might seem like a no brainer for some, but let me tell you, there are plenty of people out there that get anxious just at the thought of taxes, paperwork, or money in general. We have few of those clients😉

If you need a more detailed checklist to get you ready for this year’s tax preparation – Click here. Thanks, Turbo Tax!

~Pavlina

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