Annual Tax Tips

MTAwMTAwbm9zaHV0dGVyc3RvY2tfNDkyMzMyNTA=April is looming and so is the IRS! Are you scrambling to gather your documents for 2013? Below are a few simple tips for meeting the filing deadline of April 15th, 2013 while also getting organized to ensure 2014 tax preparation is simple and less stressful:

  1. Watch out for W2’s coming in the mail. Normally lighter than regular mail, don’t mistake them for junk mail and throw them out.
  2. Make a list of all financial institutions and investment companies you deal with and check off tax records as they are received.
  3. If you haven’t received documents from an institution by Feb 15th, go on-line to their website and download the required information.
  4. Gather a folder and put into it all the W2’s and 1099’s received along with your financial institutions / investment companies’ list once complete
  5. Pull out all receipts you have that may possibly be used for write-off purposes. Examples are charitable donation receipts, uniform receipts and professional dues.
  6. Gather any tax payment documents you have such as estimated tax payments, property tax, vehicle registration tax, etc.
  7. If you are using a tax professional, put all the above into an online shared folder and make a list of questions to ask during your meeting.
  8. If you are doing the taxes yourself, download the software needed for both federal and state and get started.
  9. Avoid waiting until the last minute to start and / or finish your taxes. You never know when something might hold you up.

To make this process easier for next year, getting organized can help. Follow these tips to make life a little easier this time next year.

  1. Buy a simple file storage box with a lid, and some hanging files. Plastic is preferable for durability
  2. Create the following labeled files which house the following key information needed for tax records:
  • Assets – all information related to transactions on your stocks, bonds or property
  • Retirement Plans – all information related to distribution, contributions and rollovers
  • Education – all information about tuition plans & loans
  • Taxes – for copies of all estimated tax payments, real estate tax payments or personal property taxes such as car fees
  • Charitable Donations – for copies of all receipts to all non-profit organizations, both cash and non cash
  • Misc/Receipts – this can be used for all the other potential deductions such medical, dental or professional dues

3.  Be diligent about filing documents each month to avoid having to dig for information before April.

Remember another alternative to a hard copy file system is a cloud based or electronic system which works just as well. The key to either is diligence in getting the key documents in their folders!