Organize for Tax Time
It is that taxing time again! If you have not filed yet and are dreading it because you’re not organized, we have some tips from the organizing expert Jennifer Ford Berry, author of the best-selling book Organize Now! A Week-by-Week Guide to Simplify Your Space and Your Life. Ms. Ford gives advice on how to survive tax season without pulling your hair out and how to get your personal finances in order.
Here are some great tax tips to help you through the process:
- The most important step you can take to keeping your taxes organized is to first learn what you should and should not be recording. Set up a folder or filing system to save all tax receipts for the current tax year. When it comes time to prepare your taxes pull out this folder and make sure all paperwork is sorted into categories: W2 forms, Deductions, Investments, etc.
- If you use an accountant call and schedule an appointment today if you have not already! If you need to find an accountant ask friends and family members for referrals.
Are you contributing to your child’s college tuition? Look into the 3 ways you can deduct* this:
- Hope Credit
- Lifetime Learning Credit
- Tuition and Fees Deduction
*All depend on the year of college and your adjusted growth income.
It takes effort to be organized, but it can save you headaches in the long run. Also, I know that getting a fat tax refund each year may be better than owing the IRS, but it may not be the smartest way to save. After all, it represents an interest-free loan to the IRS and you have to wait to get that money back! Use the Withholding Calculator on the IRS website (www.IRS.gov) or talk with your tax professional about adjusting your withholding so you’ll get more money in your paycheck. Then put that money to work by paying down debt or creating an emergency savings fund!