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How To Prepare For Tax Season and Tax Checklist

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Do you get anxiety and stressed out when it comes to tax season? Are you tired of feeling rushed to gather all necessary information in order to get your taxes filed? I will explain how to prepare for tax season and tax checklist. No need to stress you have until April 15 to file your taxes. That doesn’t mean you have to wait until the last day to file.

Gathering or storing your tax documents can seem overwhelming. It can be a lot of information to keep over a year. Trying to remember everything you need can be hard. Why not make your life easier by having a way to store your tax documents through-out the year? Then year after year you can continue to be ahead of tax season instead of always feeling behind. I am going to give you some ideas on how to get ready for tax season with how to store your documents throughout the year and a checklist of what you will need to file your taxes.

Regardless if you are taking your taxes to an accountant, tax professional or doing them yourself you can benefit from having a process in place of storing and ultimately retrieving the necessary paperwork when it comes to filing your taxes.

Let’s start with the documents that should have when you are ready to file your taxes.

Personal Information

  • Your social security number or tax id number if you own a business.
  • Your spouse’s full name and social security number or tax if number if he/she owns a business.
  • Tax Identification Numbers.

Dependent(s) Information

  • If you have children or other dependents you should gather their information.
  • Date of birth for yourself, spouse and any dependents.
  • Social Security number for each person

Childcare records

  • Name of childcare facility, including the amount that you paid, their address and their tax id number. Most childcare locations will provided year end statement that has all the pertinent information you will need, check with your provider to confirm what they provide at tax time.

Sources of Income

  • Employed: for yourself and your spouse
  • Unemployed: if you received a 1099
  • Self Employed: bank deposits or 1099’s your received for work you provided
  • Rental Income: copy of rental payments, bank statement
  • Retirement Income
  • Savings and Investments or Dividends: bank statements, investment statements
  • Other Income and Losses

Some of these forms you may not have each year and that’s ok. This is a master list of items on your check list to keep so for example if you don’t have income from savings or investments, you could just have a file for other income or miscellaneous income then you can file those one off items in that one folder.

Types of Deductions

  • Home Ownership: you will receive a mortgage statement from your mortgage holder with your prior year’s interest, pmi and taxes paid.
  • Charitable Donations: make sure you get a receipt each time you make a donation, please check the IRS website you look up charity donations that are deductible.
  • Medical Expenses: health insurance premiums for you and your family; out-of-pocket expenses.
  • Health Insurance: your employer will send out a tax form for your records. If you are self employed keep all paperwork pertaining to your medical premiums.
  • Childcare Expenses: pay stubs showing childcare payments via a reimbursement account at work; receipts for childcare while you were doing charitable work.
  • Educational Expenses: some education is deductible, ensure you keep a payment log and write a description of what the class was for. This will help your tax professional know if the education expense is deductible.
  • K-12 Educator Expenses: any purchases you make make sure you store a copy since some of it will be deductible.
  • State & Local Taxes: track any payments paid to state or local throughout the year.
  • Retirement & Other Savings: any statements should be filed.
  • Federally Declared Disaster: keep a log of all losses and any insurance paperwork you might of received.
  • Home and office expenses: receipts; electricity, gas, and water bills; home repairs, maintenance, and renovations; internet and phone bills.
  • Vehicle expenses and mileage: gas and fuel costs; vehicle repairs and maintenance; receipts for registration and licensing; tires; rental or lease statements; personal and business miles driven.
  • Education costs: tuition, student fees, textbooks and other required equipment.
  • Other expenses: moving costs; charitable donations; tax planning and investment expenses; work uniforms; laundry or dry cleaning for uniforms and other work-only attire; business supplies (pens, paper). This category of expenses (moving, unreimbursed employee, tax/investment planning expenses) can be deducted as an itemized deduction.

Two Options on how to organize or store tax documents:

  1. A color-coded folder filing system.
  2. A labeled envelope filing system.

If you file them as you receive each document it makes it easier, worse case you should file all documents monthly to keep on top of them. Filing monthly prevents any excess build up of paperwork to have to deal with later in the year.

The filing system which ever one you choose will need to include one color or file for each category above.

Now that you have your check list of items you need to store each year and a way to store them there is no need to feel frustrated during tax season. You can try out one way of storing your documents for a year and see how you like it. Maybe you find that you don’t like the labeled envelopes, then try using the color coded files the next year. Sometimes you have to trial and error in order to see what best works in your home.

No need to wait until next year to start organizing your paperwork. The sooner you start the easier you will find a method of organization that fits your needs. Get your envelopes or folders setup in a central location and start filing your paperwork.

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