5 Tips for Organizing Your Tax Information
Death and taxes are going to happen no matter what, and you can at least know exactly when taxes are coming every single year. Getting your tax information in order and keeping it all organized will help you be prepared for tax season and keep headaches to a minimum. Check out these tips to help you get it all together.
Use a Three-Sided File Folder for Current Year’s Tax Information
A three-sided pocket folder is a great tool for keeping the current year’s tax information together. Stick receipts and other important paperwork in the folder as you get it so you will have it all ready come tax time.
Designate a Specific Place for This Year’s Tax Information
While you are keeping everything in your three-sided folder, designate a spot to keep that folder. It could be a magnetic file holder on the side of your fridge, an upright file organizer on your desk, or a spot in a desk drawer. Whatever your preferred choice is, make sure you stay consistent so you know exactly where your tax information is at when you need it.
Use Manila Envelopes to File Past Tax Returns
Use nine by twelve manila envelopes to keep previous years’ tax returns and information organized. Use a permanent marker to write the year on the outside of the envelope then put all information inside, close it with the metal clasp, then file it away. You should be able to thumb through the envelopes and grab any year you need quickly and easily.
Keep Past Returns in a Safe Place
You will need to make sure you keep your past tax returns and information in a safe place. File them away in a filing cabinet, store them in a lockbox, or keep them in a plastic storage box. Make sure they are safe from water damage and pests and keep them accessible. If you store them away in a plastic storage box (skip the cardboard box as cardboard attracts roaches and mice), be sure to mark the box with a permanent marker so you can easily find it when you need it.
Make Copies of Receipts
Store receipts are usually printed with ink that will fade over time. Important receipts for purchases need to be kept for claims on your taxes, but they’re no good if the ink has faded too much for you to read them. Make copies of all receipts or scan them into your computer so you have a backup if the original becomes unreadable.
Keeping your tax information organized and accessible is important as you never know when you will need that information. You will need tax information when you apply for loans, grants, scholarships, medical assistance, and public assistance. Organizing your paperwork will keep you from stressing when you are asked for your tax information — because you will know right where it is!