With yet another tax season almost upon us, now is the time to start preparing by collecting and organizing all your tax records. Taking the time now, will prevent you from frantically searching for tax records, days before the tax return deadline. If you don’t already have a file cabinet, or a sturdy file folder to store your records, get one as soon as you can. Even a large plastic storage box will suffice to get you started. The key is to keep all your important tax records accessible and in one place.
Your first step should involve a search for all cancelled checks and receipts for charitable donations, business and medical expenses, for the tax-reporting year. Organize these records by date, to get them ready for your tax accountant. You should also ensure that you have a copy of the prior year’s tax return. If you don’t have a copy of your old tax return, now is the time to request one from the Internal Revenue Service, as it may take several weeks to receive.
You should next prepare, a separate file of all additional sources of income you received for the tax-reporting year. These records should include any interest and capital gains income you received. Records of social security benefits as well as unemployment compensation should also be included. It is also helpful to prepare a separate list of all of your income sources and store it in the front of your filing system for easy access. A quick summary of all expected, business, charitable and medical deductions is also useful to have at tax filing time.
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