The First Step In Organizing Your Tax Information

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.

For example:

  • 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?

18 thoughts on “The First Step In Organizing Your Tax Information”

  1. Organization is definitely one of the biggest keys. Personally, I’ve been done since the beginning of January. My system allows me to have almost everything I need before it is even sent. I break down and track my salary, break out the interest from principal on my mortgage and student load, and otherwise categorize every transaction in Quicken throughout the year. This way, I can easily take my company QuickBooks data and factor everything together to see where I stand at any point in time, plus it makes tax time much easier for me.

  2. Ahhh I need to get all of my tax stuff together. Luckily my taxes are never complicated; all I need is my documentation from my jobs, and I’m good to go. My charity donations are usually in the form of clothes, food, etc so I rarely get a tax receipt for them.

  3. Since I am self employed I file quarterly so 3/4 of the work is already done come January 1st. I have everything together and am just waiting on W2’s to be sent to me from the U.S. Once I receive those it will be a quick and easy process to finish up and then get ready to do the first quarter filing for 2012 🙂

  4. We had a lot of self-employment income from several different sources last year so doing our taxes is going to be a pain. We will be better organized and paying quarterly taxes this year so next year should be much easier.

    • If last year was your first year with self-employment income, it will likely get easier to handle that aspect moving forward.

  5. I really need to get better at being organized, I feel like every year I misplace a W2 or a different tax form. I think I will go with a binder from now on to make sure I am prepared

    • I just grab a folder in January and start stuffing things into it as they arrive. It makes for less things being misplaced, anyways.

  6. I have a pretty basic system that’s always worked well for me. I just have a folder that anything tax related goes into. When I sit down to do my taxes, I just pull out my folder and everything is there ready to go.

    • Same here. With more and more electronic accounts, I do have to print stuff out that doesn’t get delivered in snail mail, so it’s mainly just going through and making sure I print everything and adding it to the folder.

    • I do the same thing and its worked for me for years. Its way less cubersome when you develop a system to organize as the paperwork comes in.

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