How To Organize Your Tax Records
Learning how to organize your tax records can save you stress and time when it is time to file your taxes. Start the year with an organization system so you know where all of your records are when it is time to file your taxes. If you aren’t sure what records you need, here is a general guide that is suitable for most people.
Your employer will issue a W-2 with your income and tax information for the year. You should also include interest statements from investment accounts and any 1099s that you may receive for work done the previous year.
File receipts for all medical expenses and your out-of-pocket health expenses.
Keep all receipts for cash donations made from the previous year. You can also deduct non-cash donations made to a charitable organization.
If you own your home or other real estate, keep all interest statements and tax assessments.
If your children are in day care for all or part of the year, keep a copy of your receipts for payment.
The interest you pay monthly on a federal student loans is tax deductible.
Letters from the IRS
If you receive any letters from the IRS, keep these in your file.
Previous Tax Forms
Keep all previous tax forms for future years.
Keep all receipts that you may need for a deduction. You may not need them, but it is better to have them in case you do. If you plan on itemizing your deductions, keep all receipts for taxes you paid, medical expenses, interest you paid, charitable donations, loss due to theft, job expenses and other receipts you think may qualify for a deduction.
If you plan to itemize your deductions, it will be a lot easier for you if you keep these receipts organized throughout the year.
If you do not have a lot of paperwork each year, you can store them in one file. However, if you have a lot of receipts or other tax papers, you should organize them by type to make your free tax filing 2012 easier and quicker.
For most people, a simple paper organizer that holds several files is sufficient to organize tax information. Use a separate file for each type of paperwork, and file receipts and information as soon as you get them. Keeping paperwork organized and not letting it pile up is important to stay organized, so file your paperwork as soon as your get it or once a month as needed.