Tax Time Organization-Prepare to File
Why wait until the last minute to do your taxes? Get a head start this year by organizing your documents and receipts early. Here is a simple three folder filing system from The Motley Fool to get your paperwork in order and help make this tax season a little easier.
Folder #1 - Income documents
- W-2s and 1099s
- Social security statements (1099-SSA)
- Dividend (1099-DIV) and interest statements (1099-INT)
- Investment income
- Other sources, such as jury duty pay and alimony
Folder #2 - Expenses and deductions
- Health care expenses
- Real estate property taxes
- Mortgage interest
- Charitable donations
- Motor vehicle registration fee
- Last year's tax preparation fees
Folder #3 - Investments
- Deductible or tax deferred investments (IRAs)
- Nondeductible investments (Roth IRAs)
- Taxable investments (stocks)
To create your filing system, label each folder with a different color so you can identify the right folder at a glance. Then drop your documents and receipts inside the appropriate folder for quick and easy filing. If you have a lot of paperwork to organize, add more folders and consider color coding your files by type. For example, use green for income related files, red for expenses and blue for investments.