Is it really time to start thinking about taxes? With the holiday rush making life crazy, do thoughts of W-2s and tax deadlines make your head spin?
Taking a few minutes now to start organizing your papers can save you time and headaches come tax filing time. Even if you have someone else do your taxes, getting yourself organized saves your tax preparer the frustration (and you the extra cost) of having to straighten things out before work begins. If your accountant doesn’t have to call you for missing paperwork or inaccurate numbers, the process moves faster and your taxes can be filed sooner. Earlier filing means you’ll have your refund that much sooner.
Here’s what you can do now.
Start a File
Take a large envelope or a manila file and label it Taxes 2014 and then diligently collect all the tax information that will be coming your way over the next month or so. Triple check all your account numbers so you have what you need. Start poking around your desk or file cabinets for any missed receipts you might need (like for the couch you donated back in February).
Include these other items:
Interest Information – You’ll want to put in any bank statements, mortgage interest statements, financial information for retirement accounts, or documents from your accountants or account managers into this file.
Employer Documents –Employer documents like your Form W-2 should go right into the folder as soon as you get it in your hand. Don’t place it on your desk for later – get it in that file and then you can forget about it until you need it.
Charitable Donations– These could include donations that were goods or cash (meaning credit card, check, or cash with a valid receipt). Did you contribute to your daughter’s charity bike ride or donate stacks of gently worn clothes to a charity? Make sure every receipt is in the folder so you can claim your donations as a tax deduction. Believe it or not, those small donations add up quickly over the course of a year.
Mileage – If you volunteer for a charity, you can take the mileage you drive (although not the hours you worked) while volunteering as a tax deduction. Keep notes of your miles with the dates, times, and purpose so you can claim it come tax season.
Invoices for Side Work Projects – Did you edit a journal article? Did you moonlight as a caregiver for a few months? You still need to claim the income you earned. If it was below $600, you won’t get a Form W-2 from your employer, but you still have to claim your earnings on your personal income tax return (generally it’s claimed under “other income”). Keep your paycheck stubs for reference.
Check Last Year’s Return
If things remained pretty much the same this year as last year, check over your income tax return from last year. Compare what you had to what you have now to make sure you aren’t forgetting or omitting anything.
Keep Track of Deadlines
Lastly take a few minutes to mark down important dates. You’ll need all your interest statements and income tax statements by January 31, 2015. The last date to file your taxes is April 15, 2015.
Getting started now means you’ll feel less pressure later. The best part is that you don’t have to do everything all at once. Check off one or two tasks a week and pretty soon, you’ll be ready for tax time.