Taxes filed? Take control of your financial future and organize your documents. Here's some tips.

Posted on March 13 2014

Filing your taxes early has its benefits, including getting your tax refund sooner and not having the stress of the April 15 deadline looming over you. Once you have sent off your federal and state tax returns, you aren't quite done, though. You still have to figure out what to do with the pile of W-2 forms, 1099 forms, and annual statements. Don't toss them into the shredder, or worse, the trash. Instead, take the time to organize your documents to prepare financially for the future.



Why is it Important to Organize Tax Documents?

The documents you used to file your tax return with OnePriceTaxes all support the numbers you entered during each step of the questionnaire process. If you happen to be audited, you will need to have those documents ready to prove how you got the numbers on your tax return. Plus, you may need to provide a copy of your tax return and other tax documents if you apply for a mortgage or other large loan in the future. That's why it's so important to organize your documents and store them safely. While you are at it, you can also create a space to organize and store your documents to make filing your taxes even easier next year!

6 Tips for Tax Document Organization

Create a space for storage:  You need a place to put all of your tax documents after you organize them, so set yourself up for success by identifying that space before you get started. Ideally, your storage space should have room to grow so you can keep documents for future years in the same place. A drawer of your filing cabinet or a banker's box makes a good storage location. If you're worried about security and protection, consider investing in a fireproof safe or storing the documents in a safety deposit box at a bank.

Sort documents into categories:  Staying organized is all about doing a little work now to save you a big headache later. While your tax documents are all out, sort them into broad categories. Some common ones include W-2 forms, 1099 forms, investment accounts, medical bill documents, charitable donation receipts, childcare expenses, college expenses, home and mortgage documents, itemized deduction documentation, and business documents. If your business is complicated, you may need several sub-categories within that umbrella as well.

Print your tax returns:  When you file your tax return electronically, it can be easy to forget about the most important document of all: your tax return. Print a full copy of your federal and state tax returns, complete with all schedules and attachments, to file with your other paper documents. Even if you have a digital copy stored on your computer or on the website where you filed your taxes, you should also hold onto a paper copy in case the digital copy is lost or destroyed.

Create labeled folders:  It's much easier to find a specific document if you put everything into a folder labeled with the type of document. Write the category of documents clearly on the tab of each file folder, or use a label maker if your penmanship is difficult to read. Also consider putting a colored dot sticker with the year written on it on each tab. For example, your 2013 tax document folders can each have a red sticker with 13 written on it. Use a different color for each year in the future.

Archive digital copies:  Before filing away your folders, create digital copies of the most important documents in case the paper copies are lost, stolen or destroyed. Scan or photograph your W-2 forms, 1099 forms, and receipts for deductions if you do not think you could get a replacement copy of the receipt if it were needed. Then store the digital copies on your computer, on a backup hard drive, and potentially even in cloud storage so you can access the copies from anywhere.

Create a system for next year's documents:  While you're busy organizing, go ahead and set up your folders for organizing your tax documents next year. Many documents, such as medical expenses, tuition bills, and charitable contribution receipts, come in throughout the year. You'll have a much easier time getting ready to file your tax return next year if you organize your documents as they come in. Add the end-of-year reports to your folders next January, and then you'll be able to file your taxes right away next year and get your refund quickly.

Organization Makes Your Financial Future Brighter

Being on the right track financially requires attention to detail. You need to know how much money you're making from your job, how much your investments are growing, and what you're spending that you can deduct from your income on your tax return. If your documents are organized, all of this information is right at your fingertips, both for filing your tax return (and complying with any audit requests) and for tracking your money as you earn and spend it next year. When you're ready to file your tax return next year, just grab your filed documents and head over to OnePriceTaxes to complete your tax return without any headaches.


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