Best Practices for Organizing Your Tax Documents

As we approach the middle of January, many people have already begun to receive documents used to prepare their taxes.  We see people employ all kinds of different way of organizing documents to bring to us, some are great, while others could use a little nudge in the right direction.

Below are some best practices to use when you’re getting ready to see your tax preparer, or to prepare your taxes yourself.

  • Group documents by type, such as W2s, 1099’s, Mortgage Interest Statements (1098), etc.
  • Remember in some cases that your forms 1099 from investment companies may be included with your year end statement.
  • If your tax preparer provides an organizer, take the few minutes to fill out at least the question and answer section, as well as to check the demographic information to be sure it’s still up to date.
  • Take a few moments and summarize your charitable contributions into two totals, one for cash contributions and one for non-cash items, like clothing and household goods.  Be sure that you have receipts for the donations, but in most cases your tax preparer won’t need to see them.  The same can be done with medical expenses.
  • If you’ve gotten any tax notices during the year that you’ve not provided to your tax preparer, be sure to include a copy with your information.
  • You won’t need the statements from your employer-provided retirement plans, like 401(k) and 403(b) accounts.

By following the few simple tips above, you’ll make the preparation of your taxes, whether by a professional or yourself, a much smoother and more efficient process.

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About Brady Ramsay

Brady is the owner of Ramsay & Associates. He specializes in financial statement preparation and personal, fiduciary and corporate tax and accounting. His professional experience includes seven years' experience for local and national CPA firms before joining Ramsay & Associates in 2006. He has a Bachelor of Accounting degree from the University of Minnesota Duluth. He is a Certified Public Accountant, a member of the Minnesota Society of CPA's, an Eagle Scout, as well as an active volunteer in the community.