2 Ways to Organize Your Tax Documents

January 23rd, 2023 by

Budget and Tax planning concept, Accountant Hand is calculating company annual tax and using calculator. Personal income tax form for who have income under US law, season to pay tax.

Tax season can be nerve-wracking for most people, because preparing a return is complicated. It requires a lot of information, which can only be found by sifting through a ton of paperwork. Even if you’re filing online, you still need to get your documents — both hard and computer copies — in order. With the following tips, you’ll be able to tame your wild paperwork, organize your documents and calmly succeed at tax season this year.

Paper route

First, collect every piece of paper, document and form you need to tackle your taxes, advises TheSpruce.com writer Sue Kay. If you start organizing before you have everything that needs to be organized, you’ll sabotage your efforts. Since tax prep is complex and covers a lot of data and details, give yourself ample time to get everything together, especially if you haven’t been diligent in your filing system throughout the year; you might have receipts in a kitchen drawer while your financial statements are stuffed in your bottom desk drawer. Don’t forget to gather your “vital” documents, such as social security numbers, insurance policies, car titles or property deeds, adds Kay.

Once you’ve collected all of the necessary documents, you’ll probably be overwhelmed by that heap of paperwork. Now is the time to divide and conquer. As you sort through the paperwork, file it into specific categories. You can use file folders to help with organization or, if you have a lot of work space, just sorting the documents into different piles can work. Just be sure that no one else has access to your handiwork (your cat who loves to knock things off tables or your little one who always has sticky hands) or you could be forced to start over.

If you do opt for folders, GoodHousekeeping.com writer Lauren Smith recommends using a color coding system to make finding what you need easier. If you have an established filing system that might be overloaded with documents of years past, now is a good time to purge, too.

“Limit all of the excess papers in your filing cabinet, like bank statements from three years ago,” writes Smith.

Digital world

Even if the idea of keeping track of every scrap of paper, receipt and document makes your head hurt, you know that filing taxes is a must-do. Instead of fighting necessary paperwork, embrace it, but just for a little while. Scan important documents, utilize filing tools to record them and then dispose of the hard copies; you’ll have everything you need for tax season minus the paperwork piles.

“Shoeboxed is the ultimate tool when it comes to digitizing receipts and expenses. All you have to do is scan paper receipts and add in digital ones — Shoeboxed extracts the data from your receipts, categorizes and organizes them so you end up with a fully searchable archive of receipts and expenses,” explains Grasshopper.com writer Kiera Abbamonte.

Try Evernote if you’re looking for a multipurpose tool that can assist with a wide-range of organizational needs.

“To use the app for tax documents, you can create a tax notebook and add any tags needed for things like income statements, charitable donations and more,” Abbamonte advises.

For all things money-related, choose Mint, which Abbamonte considers the “ultimate all-in-one financial tool.” It syncs with your bank account and can assist with budgets, payments, investment tracking and tax document organization.

Whether you prefer paper, paperless or both, there’s a way to easily organize everything you need for tax season.

This article is presented by Lexus of Northborough in Northborough MA. 


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