Top Tips for Taming Tax Day
The secret: it’s not what I do that day, it’s the little things I do all year long
Preparing to do your taxes, simplifying tax prep
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Top Tips for Taming Tax Day

Top Tips for Taming Tax Day

Once again Tax Day has come and gone.  For me it’s about 8 focused hours.  I sit down to prep, our CPA Steve appears at our door, we work together for a couple hours, he leaves…we are done!  We’ve had this routine for years.  Steve always chuckles and tells me I’m his most organized clients.  The secret – it’s not what I do that day, it’s the little things I do all year long.  Here are my top tips for taming tax day:

  1. The Annual Check Register – I don’t know many people that keep check registers these days.  Most everyone just counts on their on-line balance.  But I still do.  And I start a new register on January 1st each year.  That way, when it’s tax time I have many answers all in one place, my auto-pays, donation checks I may have missed, household expenses, medical bills – most of the things I pay by check I need when I pay my taxes.  On Tax Day I go through my register and it helps me to prepare my Medical, Donation and Household expense totals.
  2. Dedicated ONE Place for Tax Receipts – As you walk in the backdoor of my home I’ve created a command center.  It is the designated spot for mail, and each family member has a cubby.  There are also a couple of shelves for general use.  On one of those shelves I have a 3 drawer bin.  One of those drawers is labeled taxes.  During the course of the year any and everything I need for taxes goes in that drawer.  Goodwill receipts, on-line donation receipts, medical bill receipts, prescription receipts, and anything else relevant.  On January 1st I empty it out and put it in an envelope for totaling on tax day.
  3. Pull Records on January 1 (or 2) – Each year I start my records fresh on January 1st.  That way last year and this year are never commingled.  I put all of the prior year’s records into a Bankers Box that gets stored under my desk.  After Tax Day the box goes into storage in my basement.  I most comfortable keeping 7 years of boxes (ask your tax adviser what’s best for you).  Steve left last night at 7 pm.  My box went to the basement as he walked out the door.  I pulled the box that was 8 years old and it will go off to my towns next free shredding day.
  4. Dedicate One Spot for Year End Tax Statements – Regardless of what it is, if we need it to do our taxes it goes in one spot.  That way we have everything we need when we need it.
  5. Tell your Teenagers What a W-2 is – This is the 2nd year in a row that we couldn’t finish our taxes 100%.  We were missing one thing.  Last year it was our older son’s W-2.  This year, our younger son’s W-2.  If we don’t tell them what it is, and that they need to give it to us we don’t have it.  Bummer.

(In New Jersey where I live the % deductible for medical is substantially less than the Federal %.  Ask your tax preparer about your states limit.  It is definitely worth it for me to track this.  It may or may not be or you.)

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