Get Organized for Tax Season

by Julie

The first month of the year has come and gone, giving us the opportunity to recover from the holidays. Next comes another stressful time of the year. It is a time of gathering documents and counting up your children. It is a time when Mothers who gave birth in early January may wish they had given birth on December 31st instead.

Do you know what time it is? I’m talking about tax season. This could either be a painful time or a time to celebrate – depending on whether you owe the IRS money, or if you’re getting a refund. Do you know how to organize receipts for taxes categories? Have you been keeping a tax organizer binder? If not, now is the time to get one started!

How do I organize my taxes?

If you’re wondering, how much do you have to make to file taxes, the minimum income for 2020 for a young married couple filing jointly is $24,800.

I’m gathering documents for taxes and hope to be getting a nice refund this year. Baby H is a good deduction. I also still have myself set as “single” on my tax paperwork with my job since that withholds slightly more taxes out of each paycheck, but it means we will not owe when we file our tax return. I like to file taxes as early as I can and then move on to other more interesting things that happen in April – like my birthday.

Will you be filing a simple tax return to the IRS? Or do you need help with tax organization worksheets?

Some people will have a simple time of this as they may rent rather than own a house, may not have dependents, and so will only have their income documents. If all you have is a W-2, then you may be able to e-file a 1040 tax return for free, and quickly to boot.

This is definitely not the case for us, so I wanted to share with you a checklist of the types of documents you will need to organize before you can finish filing your taxes.

Getting Organized for Tax Season, a Checklist of Documents to gather for Taxes

Get ready to put together your tax organizer binder with this checklist! You’ll start by gathering your family details, including the social security number for yourself and your spouse, and your children. You may also need your tax return from previous years. You also want to have your bank information ready for direct deposit of your refund, if you’re getting one. Place all these paper copies into your tax document organizer to be ready for preparing your taxes.

Keep reading for a tax preparation checklist printable you can download and add to your tax organization binder.

Income Documents are where you start with gathering documents for your tax return.

W-2 wages from your employer.
1099s for any other miscellaneous income.
Or unemployment.
Any blogging income you have tracked or income from any other businesses you run.
Any stocks sold.
Did you win anything? Value of prizes is taxed.
Receive alimony?
Do you have a rental property and earn rental income?

Do you own a house? Have student loans? Interest paid on loans becomes a deduction on your tax return.

1098 from your Mortgage company, including interest paid.
Student loan lenders will send you a tax form with your interest paid.

Taxes Paid can be deducted as well.

Did you pay property taxes that weren’t already itemized on your mortgage statement?
Did you buy any large-ticket items?
Do you have children?
Children are a huge deduction.
Childcare expenses can be itemized on your deductions as well so be sure to get a statement from your daycare.

Other documents or information to gather before you file your taxes:

Have you donated to any causes? Bring your receipts.
Any unreimbursed expenses from work?
Business expenses including any conferences attended and home office details.
Did you contribute to an IRA? or a Medical Savings Account?
Did you move? Must have all those receipts!

As you can see, there are a lot of documents that need to be organized before you can file your tax return.

What’s the best way to store tax documents?

Personally, I’m a fan of electronic files. I like to have one folder on my computer where I download PDFs of all the relevant documents and give them a meaningful file name. But I know many people are fans of printouts. If you’re going to a tax preparer, you want a printout of everything as well.

You can get a tax organization binder (a regular binder with dividers or folders) or a large accordion folder with sections. There you can organize by type of document, as per the list above (your sections can include income, loans, child care, other deductions, tax receipts folder, etc).

Should you use tax software to file your tax return?

Tax software is very helpful because you are asked a series of questions that help identify other documents you may have missed. I have filed our taxes in the past using software, and I found it was very easy to follow and complete. This was when we had straightforward documents and we figured we could figure out the rest.

I’ve always used the H&R block software when I DIY’ed our taxes. I like that they have audit support and you can ask questions while still being able to do everything from home. It’s really easy to use and asks you questions along the way to make sure you’re including everything that is required.

When to use a tax preparer?

I definitely recommend going to a tax preparer if your return is going to be super complicated. While the DIY tax route is a great option for very simple returns, if you have your own business or many items you plan to itemize and deduct, it is always best to go to a professional.

You will be served best by an official tax preparer who understands the ins and outs of tax laws and can help you claim all applicable deductions. You also might consider using a tax preparer if you’re doing your own taxes for the first time.

If you’re wondering how to organize tax documents for an accountant, it is the same way as getting organized to file your own taxes. You collect all the documents and organize them in a folder or binder. Then rather than typing in all the details yourself, you provide them to your tax preparer and that person reviews the documents with you and enters the data into their software.

If you don’t know how to choose a tax preparer, let me help! I’ve also used H&R block in-person for our taxes and found that route to be quite helpful. They ask you a lot of questions and can help clarify your specific needs.