It’s simply a waste of time to wait for tax season to come
around in order to get organized. Many of us deep clean our homes in
the spring and in the fall. Why not make cleaning out your file cabinet
part of your routine?
Procrastination habits are hard to break, but once you get
started, you’ll finish before you know it. Begin by following these
eSmart Tax Tips.
- Read through your tax returns from the previous years to
get a good idea of how you filed, what documents you need, and which
deductions you took.
- List out the documents that need. I recommend arranging
them by tax category: Keep all your W-2s and 1099s together for income,
mortgage interest and charity receipts go in deductions, exemption
paperwork goes together, and so on.
- Know what to keep and what to shred. According to the IRS,
you should keep your tax records for as long as the following timetable
||Then the period is:
Owe additional tax and
(2), (3), and (4) do not
apply to you
Do not report income that
you should and it is more
than 25% of the gross
income shown on your
||File a fraudulent return
||Do not file a return
File a claim for credit or
refund after you filed
The later of 3 years or 2 years after tax was
File a claim for a loss from
Also, make sure you categorize each tax return (and the
supporting documents and receipts) by year.
After you havve sorted everything, it’s time to give it a home.
Find a system that works for you. I have a bright, color-coordinated
hanging folder system in my file cabinet. I have everything organized
by tax year and within the tax year label, I have the documents broken
down by category. I also have a massive accordion folder in the tax
year labeled “2013” that I empty the receipts from my purse into every