It’s rumored that the average lifespan of a New Year’s
resolution lasts only two months – HA! Try two glasses of wine for some of us
(ah-hem). However, for those of you that decided you were going to get organized
this year, here is the hope that it may pay off - literally.
It’s no secret that organized tax records could yield a
higher refund or a lower tax bill. Being able to find every receipt and keeping
precise records ensures you have the proof needed to file your taxes
accurately. Plus you need documentation to back your claims if you itemize and especially
if you are ever audited. Organizing tax forms in a binder or folder will make
it easy for you come tax time and, hopefully, will prevent you from missing any
credits or deductions.
Here’s a rough outline of sections for your tax binder:
Receipts. If your
receipts are abundant (currently fill a shoebox), you may want a separate
folder using the months as dividers and a plastic pocket for each. If you can
afford a receipt scanner, that’s the obvious choice. Examples of receipts you
may want to keep are: energy saving appliances, work-related magazine
subscriptions, office supplies, job-required uniforms, educational courses for
With a Flexible Spending Account, this is almost a necessity. It’s so
easy to keep everything together when a medical question arises. Having these
in the tax binder makes preparation easy come tax time.
Mileage. Keep a
mileage sheet for medical trips and any miles you drive for medical, business
and even volunteering. For 2014, the rate is 56 cents per mile for business
purposes; 23.5 cents per mile for medical or moving purposes; and 14 cents per mile while volunteering for charitable organizations. You can
find a free printable for your mileage log here.
forms. Personal property taxes go in this section along with any additional
tax forms the state sends at the end of the year.
forms. W-2s and 1099s, 1098s, all would go here, and any other tax
forms that trickle in through the mail.
It is recommended that you keep tax documents for three
years, and if you’re self-employed or have various sources of income keep them
at least six years.
Having this binder will make your tax preparer jump for joy.
And make your life during tax time a lot easier.
Disclaimer: Every effort has been taken to provide the most
accurate and honest analysis of the tax information provided in this blog.
Please use your discretion before making any decisions based on the information
provided. This blog is not intended to be a substitute for seeking professional
tax advice based on your individual needs.