Monday, January 28, 2019

31 Days to Organization - Day 28: Tax Prep 101 - Year End File Organization

Happy New Year! January is a time to start begin again with a fresh, clean it is only appropriate that January is National Organization Month! And since many people make a New Year's resolution to become more organized, I've been be posting organization tips every day for the during the month of January. Missed a day? You can find them all HERE.

Day 28 - Tax Prep 101 - Year End File Organization

Although April 15th is still many weeks away, the tax deadline has a way of sneaking up on you and catching you by surprise. If you're not careful, you may find yourself rushing around at the last minute trying to get your paperwork in order and attempting to find all the information you need to get started, much less finished.

Make your tax season much less stressful by preparing in advance. A little planning and some organizing strategies can go a long way toward helping you get through tax season early and with minimal stress.

Did you know you can order copies or transcripts of current and previously filed tax returns from the IRS? Returns are available from the IRS for a fee of $50 per return (as of January 2019). Or opt for a transcript of your return which will include most of the line items of your return.

Watch your mailbox for necessary paperwork. Keep all the information that comes in the mail in a dedicated "tax file". If you don't have a lot of paperwork to keep track of for your taxes, you should still keep it in a dedicated place for safe-keeping. Having everything in one place eliminates the last minute "scramble". Here are some of the more common items to watch for:

  • W-2s from employers
  • 1099's
  • Mortgage interest statements
  • Rental income statements (if you have rental properties)
  • Interest-income statements from savings accounts or divided income statements for shares you own
  • Student loan interest and tuition paid
  • Personal property tax information 
Be sure you have the right forms. You can find them at post offices, libraries, and online at If you plan to use tax software, the appropriate forms should be included.

Gather deductible information such as any charitable contributions, child care expenses, insurance premiums, etc. Even if you don't plan on itemizing, having this information available can help you determine if a standard deduction is the way to go. Itemizing may prove to offer a larger refund for you.

Have previous years' tax returns on hand. You may need to refer to them for federal or state refund amounts or previous deductions you have taken. You can also scan through these to see if there were any documents you needed last year that may also apply to this year's return. If you haven't kept your past tax returns, they are available from the IRS for a fee of $50 per return (as of January 2019). You can also opt to get just a transcript of your return which will include most of the line items of your return.

Double check your numbers! All dollar amounts for income and expenses should be checked throughout your return, but even errors in street address numbers and social security numbers can slow down the tax return process if a digit is wrong or left out.

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