It may seem like tax season has just begun, but it will be over before you know it. Staying organized for tax season can help minimize the headache of filing. It’s never too late or too early to set up a system for tracking your tax records, so here are five tips for organizing your taxes:
1. Mental preparation.
The whole tax process has to begin with a mental preparation. Marking your calendar for a tax date with a specific starting time can help set a deadline for your organizing records. Don’t overwhelm yourself by trying to jam everything in a small period of time. Leave time for mental breaks to reward yourself for completing a single task on your list. This can help you override procrastination and start the tax season off right.
2. Create a system.
Some look at tax season as a yearlong process. Tax records can be collected in low-tech or high-tech systems. Once you have found your system, whether it is a shoebox or an electronic filing system, it’s important to maintain that system for paperwork. One tip that many accountants have deemed helpful is setting up a large folder titled “current year” on the first of every year and place any key documents such as receipts and credit card slips for business expenses or major purchases in it throughout the year.
3. Be informed.
An accountant should be used to help prepare your taxes, not to organize the paperwork. You want to get the most out of your tax consultation session so it can be important to do some homework beforehand. Some recommend sorting through receipts and other paperwork during down time, such as watching television or listening to music.
4. Review the past.
Like many things in life, looking back on the past can help refresh your memory and work as a mental checklist for what you are trying to accomplish. You can use past tax returns as guides for the current tax season. Some even download tax preparation checklists online to help keep them on track for tax season.
5. Credit score.
Requesting a copy of your credit report is very helpful for preparing for tax season. Your credit report can work as a review of your credit history and will help you set priorities for paying down debt and improving your credit score.
There is a lot of work that goes into tax season and preparing for it, but using just a few of these can help make taxes less of a headache. With the help of these five simple tips and your accountant, tax season will be stress free for years to come.