Confessions of a Tax Organizer

Whether you file your own taxes or pay a professional to have them filed for you, below are some helpful tips that will keep you organized this tax season. In addition, included in these suggestions are ways to maximize your deductions, while reducing your tax liability after year end.

Step 1: Start with a Tax Organizer.  Most professionals provide them at the beginning of the calendar year.  It’s a simple questionnaire and topical index with tax related topics that are specific to our household. I answer the questionnaire and print off the topical index.  I then go through the topical index and download our tax documents that are needed.  This is the most time-consuming step, but an essential first step.

Step 2: Maximize your Contributions. There are a handful of accounts that still accept contributions after year end, but before the tax-filing deadline.  Examples of these accounts are Health Savings Accounts, SEP IRAs, Roth IRAs, and Traditional IRAs. We have a Health Savings Account, and while we contribute monthly, I don’t always max out at year-end.  Reviewing the annual limit and what we’ve contributed, allows us to “true up” and make any additional contributions. 100% of contributions to Health Savings Accounts are deducted from gross income.

Step 3: Wrap it Up. This is the most satisfying step.  Get a binder, some dividers, and a hole puncher.  This is not time consuming but is a necessary and hopefully your last step. We have 10 dividers, and our first one is “Missing Info.”  This is a short list of tax documents that aren’t ready yet, as not all tax documents are available at the same time.

We hope you have a “stress free” tax season and that you find these tips helpful as you prepare this season.