By M. Colleen Klimczak
Whether you prepare your own taxes or take them to an accountant or professional preparer, there are steps you can take to make the process easier for all involved.
(And if you are efficient and have already filed your taxes, pat yourself on the back, then skip to #4 and #5 to see how completing your tax return next year can be even easier.)
- Look at the order of last year’s return, then collect and organize your information in the same order. Information should include: W-2s, 1099s and K-1s; real estate taxes; mortgage interest; charitable contributions; union dues; unreimbursed work expenses; cost basis information for investments sold; student loan info/college expenses; childcare expenses; last pay stub of the year; receipts for items you plan to itemize; medical expenses/proof of insurance; and information for any new life situation, like birth certificates and social security numbers for children born in the tax year.
If you made any major purchases or sales this year (a home, major investment or business), collect the pertinent paperwork for your use or to take to your accountant appointment.
You are responsible for this process. If your taxes are professionally prepared, your preparer is responsible for asking thorough questions, but you supply the answers and the information.
- Get ready. Get set. Go! Even if you are still missing a few pieces of information, start working on your forms, and then complete your return when you receive the last details. This avoids panic as April 15 looms closer, and gives you at least an estimate of what your taxes may be, and whether you will owe money or receive a refund. An incomplete picture is better than no picture at all.
- Don’t delay, period. Perfectionism and procrastination are not your friends. Do yourself or your preparer a favor, and just do it!
- Give your papers a home, to make next year even easier.
Create a folder called “Relevant Tax Info, 2017” or 2018, etc. Keep it close at hand.
Within the larger folder, place three or more manila file folders titled something like:
- Items I Know Are for Taxes (charitable donation receipts, sale and purchase information, taxable transaction information, etc.)
- Items I Need to Ask About (items you want to ask your accountant or preparer about that may impact your taxes.)
- Receipts for Purchases you can claim, (i.e. business expenses.)
- Add relevant tax information to this holder throughout the year, as it occurs.
- Buy A Shredder. Once your taxes are filed for 2016, you can go back and shred tax returns that are more than 4 to7 years old (ask your tax professional for his or her recommendation). Shredding is the best and safest way to dispose of those old, unnecessary tax returns.
You can do this, friends, and you’ll feel so relieved when your taxes are filed! Whew!
(M. Colleen Klimczak, Certified Professional Organizer, operates Peace of Mind Professional Organizing, LLC. 708-790-1940)