Taxes: How to Organize Tax Information Throughout the Year

 We are officially in the midst of tax season. I don’t know about you but that’s not a time of year that I particularly enjoy. The thought of sitting down with my income information and all of the things that I’m hoping to claim as deductible income and figuring everything out just seems so overwhelming. Every year at tax time, I swear that I’m going to do a better job of staying organized with my taxes throughout the year so that it’s not such a hassle when April 15th rolls around. I’m happy to say that I’m doing a lot better with keeping track of stuff in 2009 (so far!) than I did in the past.

Here are some of the things that I’ve started doing to organize my tax information throughout the year so that next year’s taxes go a lot more smoothly than this year’s:

• Relying on technology. I happen to think that the best way to stay organized with taxes throughout the year is to get a great computer program going for tracking expenses and income. There are many different software programs available. Alternatively, you can use the tracking systems provided by your banks and credit cards or you can create simple online spreadsheets for these things. The technology and computer programs that you use are up to you and should be based on what’s easiest for you to understand since the whole point of this is to simplify your financials. A little bit of trial and error with different money tracking systems goes a long way towards making tax time easier. Microsoft Money is the one that I think is worth starting with.

• Organizing my paperwork. For the most part, I’m keeping track of everything through the online system that I’ve set up but that doesn’t mean that I feel entirely comfortable getting rid of the papers that I need to accumulate for my taxes. The key here is to get super organized with paper work. I have two different physical files for this – one is for financial information and one is for expenditures. Each file has twelve folders in it pre-labeled with the months of the year. All of my receipts, bills and expense information for January went into the January 2009 folder in the expenditures file. All of my paycheck stubs, savings account information and loan stuff went into the financials file. I’ve backed this up with a computer spreadsheet organized in the same two-part fashion which lists each of the things in the file in case I lose that somehow.

• Playing around with an organizational system that works best personally. The two-part system described above is simple enough for me to use but still keeps me organized. It’s not enough for some people though. Some people require a more detailed method of separating different financial information – they may have separate monthly files for different types of income and expenses such as primary job income, secondary income, loan information, childcare expenses, property taxes and insurance. You need to figure out which method of organizing makes the most sense in your head and separate papers according to what works best for you.

• Scheduling one day per month to deal with this stuff. The big thing for me is taking the time to actually do all of this. I have now started just scheduling right on to my Google Calendar. For me, the best time to do this is the first Sunday of the month. I set a chunk of that day aside, close the door to my home office and tackle the task of organizing my tax information on both paper and computer form.

• Simplifying my accounts. Even though I’ve gotten a lot more organized about my finances this year, I do know that the more accounts that I have, the more difficult it is going to be to stay organized. A big goal that I achieved last year was limiting the number of financial accounts that I have. I now use just two main credit cards – one for all of my work-related (and deductible) expenses and one for everything else. This makes it really easy to deal with the deductible stuff – every statement from the work credit card just goes immediately into that month’s file for me to have at the end of the year.

• Keeping last year’s tax info handy. I don’t have to use it much but it’s nice to know that I can grab last year’s paperwork and look at it if I start to get confused about exactly what I am doing.

• Making a list of tax goals. What do you want to get out of better organizing your taxes? For some people, it’s the ability to sit down on January 1st and get taxes out of the way. For others, it’s the chance to feel “caught up” on taxes when they sit down to deal with them once a month. For still others, it’s the goal of learning how to rely on technology to assist in tax organization. And for most of us, the goal is to save some money. Make a list of all of your small and large tax goals and post it where you can see it regularly so that you are motivated to stick with the plan of staying organized with your taxes this year.

• Buddy up with someone who also wants to organize their tax stuff. Sometimes the only thing that you really need to get organized with your taxes is a little bit of external motivation. Make a commitment with a spouse, family member or friend to help each other get organized with taxes this year. The commitment will make you more inclined to stay organized plus you’ll probably learn some tips from the person that you’re doing this with.

These are some of the things that seem to be working for me in regards to organizing my tax filing information in a better way this year. Hopefully they’ll also work for you!

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Comments 4 comments

Sinea Pies profile image

Sinea Pies 5 years ago from Northeastern United States

For years I was unable to find the tax info from the previous one. FINALLY I learned and have it handy both on my computer and in a file to grab when tax time comes around. So much easier! Isn't being organized grand?


TheSenior profile image

TheSenior 6 years ago

Being that my field is accounting this is very good advice. If you don't have a business have enough columns that one is personal, and the rest reflect each credit card - put all catagories in alpha order leaving room for catagories that pertain to which card - then at the end of each month have a sum sheet attached to that month of sheets - then when doing taxes much easier to add only 12 sheets. If have a business keep a folder of each months ledgers/financials and at end of year it will be a Snap!


Mark Randall 6 years ago

Being organized when it comes to taxes to me means working on it year round. You'll be happy in the end if you take a few extra moments to place receipts and other docs that you will need in a folder for the next filing season. If you do find yourself in trouble, there's quite a bit of helpful information at guardiantaxresolutions.com.


Blake Flannery profile image

Blake Flannery 7 years ago from United States

Thanks for sharing your system with me. I am not quite as organized. Maybe next year.

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