The income tax deadline is quickly approaching and many people are panicking. We all know how much time and effort it would save if we would have everything nice and neat and properly organized.
Create a simple all year round filing system
Use binders to separate any tax related documents. If you are more visual, Samsill’s Fashion View Binders come in 5 bright colors. If you prefer uniformity, the Non-Stick View Binders might be better suited for you. Once you have picked your binders, you can sort your documents into three categories…income, expenses, and taxes. Income can include payroll stubs, 1099′s, or annual statements from financial institutions. Donations, school/tutition, or mileage can be incorporated into expenses. Here is a simple form for tracking your mileage. Put any receipts of taxes you paid throughout the year in your Taxes Binder.
Use binders to separate taxes by year
Once you have finished filing for the year, store all of your tax documents in one binder for reference. Samsill’s Titan Binder is an ideal solution for those who need to store a lot of documents and information. It is a good idea to copy your receipts and store for at least six years. In some cases, the IRS can audit you up to six years back.
Schedule time to work on your taxes
It’s easy to put off but April comes fast. If you schedule time to dedicate to either organizing or filing your taxes, you will be more apt to finish on time. You can set aside a few hours over a span of days or dedicate one day to finishing everything.
Make notes on receipts about their business purpose
Great for dining and entertainment expenses, making notes on receipts will make it a lot easier to remember what the business purpose was.
Start preparing for next year
While it’s still early in the year, invest in your binder or organization system so you won’t have to play catch up at the end of the year. You can also set aside one day each month to file any tax related documents so you won’t have to do later. The earlier you get organized, the less you will have to beware the ides of April 2014.
As another year and tax season pass the main trick to getting ready for tax time is not waiting until the last minute to get organized. Kick those tax filing anxieties to the curb with those simple tips.
How do you organize your taxes? Share your tips below.