It seems it is that time of year again; tax time!
For many, thinking about taxes doesn’t even take place until April 1st! And that means lots of stress. Why not get organized now; start the process early so by mid-March you are calling to make that tax appointment or filing yourself online. A delayed decision on tax prep makes everything harder and more stressful.
The first step is the gathering stage. You can’t figure out totals and file until you have all of the receipts, mailed tax forms and documentation. If you are a client of mine, you know you should have a tax folder or bin set up that you can plop things for taxes in all year long. If you don’t have this (start it now!), you will have to go through your papers/files. If you itemize, you will be gathering more than others.
Make a quick list of all the things you need to find and account for: medical receipts, tax receipts, child care fees, car expenses if you deduct that, donation slips, and more. That way as you go through, you really know what to pull and what to let go of, shred or file away.
This gathering stage is the perfect time to also purge. You really do not need as much paper as you think. If you must remember values, start a notebook to jot down the details such as the National Grid bill amount for the last 12 months. You can easily accomplish this all on one page of paper and let all the bills go!
Grab a medium sized box or bin or folder to place “all things taxes” in. Place it in a safe but prominent location.
The second step is the sorting stage. Now that you have found all those items you need from your list, this is the time you dump out the box and sort like with like; the medical together, the donations together and so on. Binder clip all these groupings together.
Next, do your totals. Give each category its own piece of paper to list out values. Grab your calculator and total up each category. That way when you hand over your info or start filling in the online form, you can just grab each pile and put the data in.
Now file! Call your tax professional or go and buy TurboTax. If you are doing it yourself, I recommend picking a date to start and then a second date to finish. Make appointments in your calendar called File Taxes. If you are having a professional do it, remember that they need 1-2 weeks to process and finish your taxes so make sure you pick a date and then second date that happen before 4/15.
Once you are done, ask yourself how it went? What could you do to make the process easier next year? Maybe you just need to establish a bin/file for tax paperwork throughout the year. Or maybe you have that but want categories within it to separate out; receipts, donations, medical, car. That way you just total and go!
Doing early and taking notes on what to change will set you up for smooth sailing next year!