Getting Organized for the Tax Season

Tax Organization Tips: Getting Organized for Tax Season by Valentina Sgro

Preparing and filing your tax returns doesn’t have to be difficult or unpleasant even though the United States tax code is complicated and convoluted. For most people, large parts of each tax form are irrelevant. You can simplify your tax preparation process by focusing in on the items that are applicable to you.

Basically, all the tax records you need fit into one of two categories: income and credits/deductions. In other words, amounts that add to your taxes and amounts that decrease your taxes. Whether you’re a do-it-yourselfer or you have someone else prepare your tax returns, you’ll need to keep track of these items throughout the year. .You’ll be more likely to follow-through on keeping your records up-to-date if you adopt simple, easy-to-use tax organization tips.

Most ot the income you receive will come with its own built-in record: pay stubs, bank statements showing direct deposits, etc.  At the end of the tax year, youll also receive statements containing summaries of all of this income on Form W-2, various Forms 1099, and Schedules K-1.

You may need to keep your own records of income from a few sources such as minor lottery winnings, jury duty pay, or alimony.  Either make copies of the checks before you deposit them or write the date, source and amount on a slip of paper.

 The easiest way to keep all of your income information together is to start a file at the beginning of the year and drop the paperwork into the file as you receive it.  A pocket file folderone with sides so pieces of paper cant slip outis a great choice.  If you use a file that expands to an inch or two thickness, that should be all you need.

Just as with income, most of your expenses that youll be able to take as either credits or deductions on your tax return will come with their own built-in record.  If you pay by check, youll have your check register and canceled check image.  You can flag entries in your check register to indicate if they are tax deductible.  (Some checking accounts come with checks that you can code, so that the statement will come with the tax-related payments segregated from the other payments.)  If you pay by credit card, youll have your credit card receipts and statements.  You can circle tax deductible items as you review your credit card statement before making your monthly payment.   

A few payments will require you to create your own record.  Save your bill stubs or sales receipts, or write the reason and amount for the payment on a slip of paper.  If a payment is tax-related, try to avoid paying by cash.

You'll need to create your own lists of items you donate to charities and attach them to the receipts the charities give you.

 If there's room, you can keep all of your expense information in the same pocket file folder as your income information.  Otherwise, create a separate folder.

Preparing Your Returns
If you use a paid tax preparer, just take your file folders to the preparer.

 If you prepare your own taxes, take your cue from the IRS.  Every year theyll send you forms based on the ones you filed the year before.  So, think about whether you have income or expenses that are much different than last years.  If not, use your last years return as a guide to how to report this years information.  If you have something new in your financial pictureperhaps you sold some stock or your housethen get the extra forms.  These days, obtaining the right forms is simple and fast because all the forms, with instructions, are downloadable from

 As you prepare this years return, be on alert for information that youll need again for next year; for example, carryover amounts.  And pay attention if you need to find information buried in financial reports in order to make required calculations; if so, write your own set of instructions so you wont have to figure out how to do it all over again next year.  Put all of this information in a new folder that will hold all of the information youll need for next years tax returns.

 .And remember, the single-most important tax organization tip is to collect all tax-related records in one place throughout the year so that all the information you need is right at hand when tax season rolls around.

In 1985, Valentina Sgro left her 12-hour-a-day position at a major law firm for a 16-hour-a-day job of childrearing and household management. In 1989, realizing that things were out of control, Val began trying to find a system which would get her organized. In 1997, with order established in her own life, Val founded SGRO Consulting, Solutions for Getting Really Organized.

Val received her Bachelor of Science in Business Administration degree, with a major in accounting, from John Carroll University, University Heights, Ohio, in 1977, and her J.D. law degree from the University of Michigan Law School, Ann Arbor, Michigan, in 1980. She is a Certified Chronic Disorganization Specialist and a member of NAPO's Golden Circle.

Val is the Treasurer of NAPO, the National Association of Professional Organizers, and is a past treasurer of NSGCD, the National Study Group on Chronic Disorganization. Her recently published book Organize Your Family's Schedule In No Time is available at fine booksellers and through