organized tax filing system

How To Stay Organized At Tax Time

Getting organized at tax time can be a challenge, but it doesn’t have to be difficult.

It’s time to tackle that messy documents drawer under your desk and get organized for tax time. The biggest secret to getting prepared for the busy tax period is to keep your documentation organized all year round. Follow these great tips to make tax time a lot less stressful!

How to stay organized at tax time: Create A Filing System

Half the stress during tax time comes from trying to locate files. Start your financial year off fresh by setting up an organized tax filing systemorganized filing system. Here are just some of the ways to make your job easier come tax time:

  • Place your file system in a home office, or somewhere within easy reach of where you conduct business affairs.
  • Purchase an accordion folder to file tax-related documents.
  • Labels are your best friends! Label everything, from folders to documents. Make every document, folder, and file, clear and easy to sort through.
  • If you’re an independent contractor, consultant, or run a small business, most likely you itemize your tax deductions. If you don’t keep everything organized, filing deductions can be very stressful and time-consuming. To make it easier, create a filing system where every different type of document has its own folder and an attached description.

How to stay organized at tax time: Get Your Receipts In Order

Tracking down receipts can be a very stressful process. Many people end up tearing their hair out by the end of the tax period. There are a couple of things that you can do during the year to make it as seamless as possible.

  • Label receipts – this is an easy way to categorize your documents and make them easier to identify when filing your taxes. Write down the reason for the expense of your receipt when you make your purchase. This will make filing your taxes a breeze!
  • Go paperless – whether you run your own business or have a 9-5 job. Chances are you will need to file an How to stay organized at tax time save your receiptsassortment of different receipts. However, during the year many receipts get misplaced or the ink can fade and make the receipt illegible. Start uploading your receipts online! There’s a lot of great software where you can scan receipts and keep them in an online account. Many even allow you to take a photo and upload them right from the convenience of your phone. Having all your receipts in one place as a clearly legible scan is invaluable.

How to stay organized at tax time: Online Forms

If you often give to charity, it’s a good idea to start a spreadsheet of your tax-deductible donations. In the spreadsheet, you may include the amount of the donation, the date that you gave the money, and the charity you gifted it to. Make sure you also have further proof of your donation. This can include a bank record or official note from the charity organization providing the details of your donation.

Where To Store Your Documents

Many people file their documents in a random desk drawer in their office. Tax documents are important and sensitive items. Consider getting a secure filing cabinet to lock away important tax documents and identity files such as passports. You may also need to invest in a paper shredder. Keep in mind that bank documents, tax files, and other sensitive information should always be disposed of thoughtfully.

If you follow these simple steps during the year, you can get organized and save time and stress this tax season! And, if you need a little support in getting your paperwork organized, give us a call. Always happy to help!