06 Mar Organizing Your Taxes
Ah, the turn of the New Year always has so much to offer. Sugar overload from Valentine’s Day and Easter, spring flowers and taxes. Although no one looks forward to April 15th, it is important to stay organized throughout the year to optimize your maximum return. Keep these tips in mind and you’ll tax process will be a breeze.
Keep Track of Your Documents
Designate a filing area specifically for your receipts, important forms and any tax deductible evidence. Developing this habit early in the year, and keeping up with it, will make filing your taxes for the next year a cinch.
Divide Your Documents
Organize your files by the way you’d file them. For example, keep your income related files together and keep your deductions together. Know what documents fall into each category. Income documents would be investments, salary and any additional income you earn. Deduction documents would be property taxes, charity or donations or mortgage interests.
Don’t Throw Anything Away
Although it may seem like extra clutter in your cabinet, holding on your previous tax documents are important. The golden rule is to keep them for at least seven years. Typically, if the IRS audits you, they will want filings from the last seven years. You can also use your previous files as a guide for your future filings.