Hopefully you have learned your lesson from previous years when you franticly searched high and low for those precious scraps of paper and related documents. Uncle Sam is ready and hopefully you are too. If you have not implemented a file folder or large manila envelope to stash away receipts throughout the year, here are some tips for getting it altogether.
This is the month when all of your important tax documents will be delivered in your mailbox. Start now and dedicate a place for these W-2’s, 1099’s, investment statements, year -end contribution statements etc. If you have not received a W-2 by January 30th, call your employer.
[AD]Whether you will be sitting at your computer with a calculator and some strong coffee, or if you are handing over a thick envelope to your tax preparer, get some sort of order to your documents. Separate your papers and receipts into categories: real estate, investments, income, business expenses, charity, childcare, medical, and miscellaneous.
If you feel that your tax situation is more complex than the average person, perhaps you should start with a checklist to ensure that nothing is missing and no deductions will be left unaccounted for. Most tax software programs will have an extensive list.
If you aren’t gifted administratively and don’t have a file system in place, chances are you might not know exactly where the kids’ birth certificates and social security cards are. This might not be a big deal if you are preparing your own taxes, but if you had a birth in the family this year you might try organizing the piles of paper in your hall closet and find that important information.
If your younger children attend daycare, make sure to get the statement with the organizations tax identification number and something in writing showing the dollar amount you paid for care over the year. Likewise, if you pay a babysitter or nanny, be sure to keep those records of payment or create some time of invoice to turn over to your accountant.
The process of preparing your taxes does not have to be painful. The date never changes from year to year, so make 2010 the year to start some good habits that will save you valuable time in the end.