If you’re like me, tax time each year can be a little frantic and stressful. You have to make sure you’ve got all your documentation, W2s, charitable deductions, brokerage statements ready to go. In an effort to avoid the mad rush each January/February (or March/April if you procrastinate), it’s wise to stay organized. I personally keep a file folder handy with a sheet of paper in which I loosely keep track of my finances throughout the year; both income and deductions. At the end of the year, when those W2s and charitable deduction summaries get mailed to me, I collect them in that file folder until it’s time to file taxes. In an effort to avoid that stressed feeling next year, here are a few tips to help you stay organized this year:

Keep Everything in One Place

It may sound simple, but all tax documents should be in one place. This can be just a box in the closet, though it should be easily accessible, so you don’t forget to put something in it. Most people will benefit from having one file folder so everything can be kept a little more organized throughout the year and it’s easier to find anything that might be needed during tax time. For your tax preparation, find a system that’s going to work well for you and enable you to find everything when you need it.

File All Income Paperwork Throughout the Year

All income paperwork can, and should be saved. Anything earned should have a pay stub or other receipt with it. Any of these papers should be filed as soon as they arrive. See a letter about interest earned on a savings account in the mail? Go ahead and file it with other income paperwork. Get a paycheck? Save the stub with income paperwork. For emails, save the email on your computer in a specific file folder and print a copy to put in the file, so everything is together and easily found!

Keep Receipts and Expenses Together

Deductions are a crucial part of filing taxes and no one wants to miss out on a deduction because they can’t find the receipt they’re looking for. If you were ever to be audited, recipients will be required, so save them even after you file your taxes. All receipts for expenses that could be tax deductible or that may lead to a higher deduction should be filed together. This includes receipts for anything donated to charity, medical receipts, or business receipts. If you are self-employed or own a business, you should keep business expenses in the same area, just as long as they remember to put everything in the folder, so it’s ready to be sorted during tax season.

Use Software to Keep Everything Organized

In today’s modern day and age, most of us are going to use some sort of software to help us organize, and file our taxes. There are free software options available, so it doesn’t have to be expensive to stay organized. Using software to track everything can cut down on the amount of paper that needs to be stored as some software programs make it easy to scan and upload paystubs, receipts, and other documents that may be needed during tax time. This can also be used alongside storing paper copies of documents so the documents won’t be lost if anything happens.

Tax time doesn’t need to be as stressful as it is if you’re not organized. Taking some time to get organized can save you time and money when tax season comes around again, and it can help reduce your stress since you’ll already know where all important documents are located. Whether you decide to create a folder system, use the software, throw everything in one box, or a combination of these, make sure you stick with it so you’ll be prepared to do your taxes. 

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