By now you’ve probably gotten that old familiar letter in the mail: your W-2s have arrived, H&R Block and TurboTax have been bugging you for appointments, and your family is probably bugging you about what kind of fun vacation or home renovations your tax return can pay for.
But before you can get to the ‘fun’ stuff, there’s one problem you face every year: sorting through that giant box of old tax returns to find your information from last year. If you’re tired of having to deal with this every year and are looking for a faster way to sort through your mountains of paperwork, here’s a few tips we’ve found to keep everything tidied up through the rest of the year so this doesn’t happen again next year:
Separate Everything: If you’re at all like some paperwork hoarders we’ve seen (no judgment!) you probably just have everything stuffed into one of those big document boxes. One of the easiest places to start with your tax paperwork is to start separating everything into distinct categories, or at least different piles. Keep your actual tax returns and W-2s separate from things like receipts, invoices, and so on, and keep everything in their own distinct place to provide for easier filing later.
Figure Out Where It’s Going: After you’ve gotten everything broken down into their own categories, the next step is to decide where you’re going to keep it! Do you have enough paperwork that you need to keep relying on larger document storage boxes (or maybe some plastic bins if you’re worried about durability), or can you rely on using some office storage like folders or binders? Do you have a room in your house it will be stored in, or are you going to tuck these back under your winter coats in the closet like before? You’ll want to figure out a good landing pad for these documents before you try shuffling them around any more than you already have.
Sort According To Type And Need: Once you’ve gotten your paperwork set up and your goal in mind, the next thing to do is get everything together. If you’re the kind to keep receipts, consider organizing them even further: big things like property tax or major purchase receipts should be kept separate from something like gasoline purchases and utility bills (and you can probably throw out the Pizza Hut receipts, unless you’re positive you can deduct those somehow), your other tax returns should be organized by year (since you’ll need last year’s much sooner than you’ll need previous years’), and anything you need for deductions this year should either go in their own pile or at least go on top so you can get to them faster.
Get Everything Put Away: Next, you’ll have to do (arguably) the hard part: getting it all put away! If you’re only organizing a small amount of documents you might want to consider a desk organizer with some binders or folders, bigger stuff might need to go back into boxes and kept on safe wire shelving in the basement or attic to protect your documents. Whatever you wind up doing, just make sure you find a safe place and commit to it.
Start A Habit Of Organizing: You know the old saying about death and taxes, but it’s true – you’re going to need to do this all again next year! Between now and next tax season, get in the habit of using your new organizational system – put your receipts and paperwork where they belong as soon as you get them instead of waiting until next year to scramble around to help cut down on the amount of effort you have to put in. Your future self will thank you!
Keep these tips in mind and you should have a slightly less stressful tax season – while we’re not accountants, we’re always happy to help keep your home tidy!