Now that it's February, chances are that you've received most (and hopefully all) of your tax documentation.
The problem I've found is getting it all together. So much mail comes in that sometimes it's easy to overlook something, not to mention the fact that we get electronic statements for more than a few things, which can save on paper and such, but require you to actually print those tax documents.
Getting everything organized can be a challenge.
For me, what I've found works best is to rely on the fact that we are creatures of habit.
What does this mean?
Well, most of us probably work at the same job, have accounts at the same banks or brokerage firms, give to many of the same charities, etc.
For us, that means that the best way to start organizing our tax information for 2011 is to look at our 2010 tax return.
I can quickly go through the return and jot down the items that we used in 2010 to create a checklist of what we need in 2011. This process will also trigger thoughts of things that were different and lead me to note what I need to do there.
- Charitable deductions – We typically give to church, schools, Salvation Army, and a few other charities. Looking through the list is a good way to remind me to look up the exact amounts
- Mortgage – The biggest deduction we have is the interest deduction on our mortgage. Jotting this down will remind me to check for our statements, and this year, we re-financed, so I can write down a note to pull out the closing statements since we can write off some of the closing costs as well.
- Income – My wife doesn't work and I didn't change jobs, so this seems easy, but I also note that I should declare income from blogging, so I add that to the list.
You get the idea. Now, there might be other changes as well that you won't necessarily see from the list, but if you check last year's statement as a first step, you'll typically cover almost everything you need to get yourself ready for this years taxes.
How far along are you in getting your tax info ready for the upcoming tax season?