Why wait until the last minute to do your taxes? Get a head start this year by organizing your documents and receipts early. Here’s 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, such as: - W-2s and 1099s - Social Security statements (1099-SSA) - Dividend statements (1099-DIV) and interest statements (1099-INT) - Investment income - Other sources, such as jury duty pay and alimony Folder #2 – expenses and deductions, such as: - Health care expenses - Real estate property taxes and paid mortgage interest - Charitable donations - Motor vehicle registration fee - Last year’s tax preparation fees Folder #3 – investments, such as: - Deductible or tax-deferred investments (Roth accounts) - Nondeductible investments (IRAs) - Taxable investments (stocks) To create your filing system, label each folder with Avery File Folder Labels and free file folder templates 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’ve got a lot of paperwork to organize, add more folders and consider color coding your files by type using Avery File Folder Labels in Assorted Colors. For example, use green for income-related files, red for expenses and blue for investments. Next, avoid the tax time crunch by setting up an appointment with your tax professional/accountant early. Soon, you’ll be well on your way to conquering another tax season. Next month, find out how long you should keep important household records including tax returns—plus “must-have” tips to better recordkeeping! |
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