4 Simple Solutions for Organizing Information for Tax Returns

Where is your tax information? For most, their tax information is in disarray. The scattered information will add to the already stressful tax preparation filing for you or your tax preparer. Unite all financial documents, financial expenses, tax forms, social security numbers, and basic information in one place to avoid unnecessary stress.

Create a Filing System 
To organize for tax season, a filing system is mandatory. A filing system saves time and stress during tax preparation. Complicated and detailed tax returns need filing systems such as a binder with dividers, an accordion folder, a file cabinet, a legal file box, a desk organizer with file folders, or a box filled with hanging file folders. All filing systems must have tabs for section labeling. Simple tax returns need simple solutions such as a school supply folder with pocket, manila folder, a binder divider with pockets, envelope, or an office clipboard.

Designate Space for Taxes
Where will you store the filing system? The larger and heavier tax organization systems need a special space specifically for it. The best location is a home office, but storing the system in a closet, cabinet, or home entertainment center will suffice. Smaller filing systems can fit inside a drawer, bookshelf, box, basket, or safe.

Shuffle Tax Information 
Get the most out of a filing system by accessing and reorganizing it several times a year. At this time, remove last year’s information to store this year’s information inside it. Take last year’s tax return information and store it in a new location. Keep those old records in case of audits or future errors. Add new tax information to the filing system as it arrives. Include existing financial information such as retirement accounts, bank interest, and social security numbers.

Make Electronic and Physical Copies 
Make a hardcopy of digital files and records by printing out the tax information and storing it in the filing system. Conversely, take the physical copies of all tax information and make a digital copy of everything. Use a PDF phone app, scanner, photograph, or fax machine to digitize hardcopy. Send the results to the desktop or email address. For emailed tax forms, make a separate folder with the word ‘tax’ on it and send the information there. Create a folder on the desktop to store desktop tax information. Back up email and desktop folders to the flash drive, external hard drive, and cloud storage.

While businesses, itemized deductions, and people with detailed finances benefit the most from tax organization, it’s imperative you dedicate a system and space for taxes. Tax filing is stressful enough without organization. Organizing tax information is one less stressful detail to dread. Less stress makes filing a bit easier to navigate.