Organize to Make Tax Season a Breeze
The worst part of tax season is hunting down and organizing all that paperwork you probably tossed in a junk drawer earlier in the year.
To cut down on the stress that comes with sifting through a sea of documents, spread the work out by doing just a little organizing throughout the year.
Most tax forms come in late January, with some arriving in early February. Use our Tax Tracker checklist, or even last year’s taxes, as a guide, to see all the forms you should be expecting in January.
You’ll be tempted to stuff each form in the envelope the moment you get it, but always take some time to look each one over and make sure they are correct. Fixing mistakes in January will be much easier than doing so in March, when you’ll be racing against the deadline. If you do need to fix a form, make sure that the originating company sends both you and the IRS a corrected copy.
Donations to charities via text messages are not uncommon these days. Review your cell phone bill for proof of charitable donations (and file them in your tax file!)
If you wait until April (or even March) to file, you can be sure the IRS’s bureaucratic arteries will be clogged, so to end the process and get that refund into your hands as soon as possible, file early and, if you’d like, electronically through the IRS website, tax software, or your accountant. You’ll receive an electronic confirmation, and you can ask the IRS to direct deposit your refund into your bank account—all of this happening much quicker than the mail.
Forms to look for in January:
W-2: income from a job
1098: mortgage interest info
1099: income from dividends, interest, capital gains, Social Security, independent contractors, etc.
Forms that are often late:
5498: IRA account info
K-1: income from a partnership or S corporation, or a trust
Planning for 2014
Even though January sees the biggest onslaught of documents, there is a lot of information that we get throughout the year. If you can be thinking about taxes every time you pay your bills or file your paperwork, you can take a huge load off at tax time. Think about it – a lot of the stress at tax season comes from trying to find those charity receipts or real estate tax bills. Create a Tax Folder or Envelope that holds potentially relevant paperwork like this; when it’s all in one place come April, you’ll be happy you did. Use this handy Tax Tracker checklist to keep with the file so that you know you’ve gotten all of your documents.
As always, if you need any assistance or have further questions, call us directly at 610.648.3814.