For many, gathering paperwork is the messiest, least-fun part of tax season. But we can make prepping for this year’s taxes different by getting organized now.
1. Find your perfect app to keep tax paperwork organized year-round.
Many of us are now digital natives, regardless of age – using technology every day to be more efficient and productive. However, some of us may not know that a multitude of apps exist to make the task of organizing tax paperwork painless and paper-free. To make tax organization as simple as online bill paying, try the following apps:
· Shoeboxed. This app scans and categorizes receipts by amount, vendor, and payment method then files them according to tax category. It even creates expense reports and tracks mileage. Then, when tax season rolls around, simply share your Shoebox account with your accountant.
· Mint or Expensify. Already use one of these popular sites? Then don’t miss the included apps for tracking, tagging, and categorizing your expenses. Come tax time, you can easily export and share the data.
· Dropbox or Google Drive. Want a system that’s dead simple but still reduces paper clutter? Throughout the year, use your camera to snap pictures of your receipts, then upload to folders in Dropbox or Google Drive. Before you shred your receipts, make sure all the details are legible in your photos.
2. Ditch paper altogether.
Still keeping paper copies of all your tax-related documents? Time to eliminate tax-related clutter and put all that valuable storage space to better use. Electronic files are usually easier to sort, organize, and share as needed. Just be sure to make backup copies on a separate hard drive so you don’t have to worry about equipment failure or loss, and password-protect your devices securely.
3. Don’t let questions about tax reform keep you from prepping as usual.
Tax reform is discussed every year – but when it does happen, it’s rarely so transformative that your tax prep changes significantly from the year before. So, don’t let concerns about tax reform prevent you from using this year’s prep list as a template for 2018. Make a master list of what you gathered for your 2016 taxes and keep it handy throughout the coming year – perhaps in the desk where you process mail every day. Then, as tax-related documents arrive throughout the year, like your W-2 or receipts for charitable contributions, paper-clip them to your master list. If tax-related events happen during the year, like capital gains being realized, attach the paperwork to your master list as well. Turning tax prep into a routine that you replicate yearly and implement year-long will eliminate the anxiety of having to re-learn something you only think of once a year.