January 30, 2014

Tax Season Organization Tips!

For some people, tax season can be a frustrating time, especially If you haven't been particularly organized in the past year. You might have moved to a new residence and kept your important files, along with a number of other items, in a storage unit to save space at home. Or you might have combined your personal files with your business documents. Whatever the case may be, finding your essential tax documents and setting them up in an easy-to-file manner can be a challenge. Having your records  on hand makes reporting faster and easier. The sooner you send in your taxes, the earlier you receive your tax refund. Here are some organizing and self storage tips to help you keep your documents in order for tax season:

File by ID numbers

The IRS creates reports on every tax-paying citizen through their Social Security number. If you are only sending in your own taxes, you don't need to worry about organizing. However, when you have to take care of your spouse's or other family members' taxes, filing can be confusing. In order to stay organized, make sure the Social Security numbers of your spouse and dependents are included in your tax information file. Try not to forget everyone you claim as a dependent. This includes parents, grandparents and even infants.

Collect pertinent paperwork

If you start early, you don't have to worry about rushing to find misplaced documents. Store all your receipts, end-of-the-year bank statements and donation forms in a clear labeled box. Separate these files by categories like Salvation Army or Red Cross donations, business expenses and tax deductibles. Statements from your bank, employer, investment firm and other institutions should be included in this box. There are a variety of forms you should expect to receive, such as:

  • W-2 - Employers provide this form. It shows how much money you made in the past year, the deductions from your paycheck, and various contributions you made to retirement plans, child care reimbursement and medical insurance.
  • 1099 - This type of form is sent to independent contractors. You will need to state how much money you made from each client.
  • 1099-DIV - People who have made investments in stocks and mutual funds will need to report their earnings. They use this form to show the IRS dividends, capital gains and distribution of funds.
  • K-1 - This file shows the IRS the income earned from your small business. 

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