Tips for Filing Your Taxes

No, I can’t offer many tips for making sense out of your 1040, but I can help you with coming up with a system for keeping your tax-related paperwork organized. 

What you’ll need:

Here’s what to do:

  1. Label one exterior hanging file “Current Tax Year.”  Inside, keep an interior file folder labeled with the actual year (“2011”).  Throughout the year, as you receive tax-related paperwork (tax-deductible receipts, medical receipts you will claim, etc.), file it in that current year file.
  2. Label another exterior hanging file “Taxes to be Filed.”  When the current year (“2010”) ends, put all tax-related paperwork in that “Taxes to be Filed” hanging file until you actually sit down and file your taxes (as in “file” with the IRS).
  3. Choose a type of container for past tax years.  If you don’t have a lot of paperwork each year, you can just use more hanging file folders in one banker’s box.  If you have more paperwork than what will easily fit in a regular or box-bottom hanging file folder, then use a banker’s box dedicated for each tax year.  Have seven of these containers, one for each of the past seven years.  Be sure to label each one with the year.
  4. At tax time, have a shredding party with what was in the oldest file.  (Some people like to keep the actual tax returns forever but will shred all the supporting paperwork like pay checks, bank statements, etc. once they are older than seven years.  Please consult an accountant or tax advisor if you have any questions.)  Now you have an empty container.
  5. Once you have filed your taxes with the IRS, place all of that year’s files in the empty container.  Be sure to re-label it with the appropriate year.  The “Taxes to be Filed” hanging file folder will now be empty until January.

 

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