Start Early
Start early and mark your calendar. April 15th falls on a holiday this year, so the filing deadline for 2021 taxes and extensions is April 18, 2022.
Set Up a System
Set up a system that works year around and is easy to access and use. There are many ways to set up a filing system for taxes, however; my suggestion is to keep it simple with a 3 part filing system.
- Income statements & documents
- Deductions
- Receipts
You can use standard file folders, baskets, bins or even envelopes. The thing to keep in mind is that they are big enough not to get overstuffed during the year and they are easy to access. Our preferred method is an expandable file folder. Make sure it has enough files slots for all of your file categories and and it’s in an easy to assess area, then just drop the receipts in as you go.
Use the Filing System
This may sound obvious, but it’s one of the main reasons many people can’t stay organized. Starting a new habit is not always easy but the benefits far outweigh the trouble of getting used to a new habit.
Keep Only Current Files
Purge and organize your filing system each year. Keep only this year and last years taxes in your current working filing system. Archive the remaining 7+ years of taxes in a separate filing box that can be stored safely in another part of your home or office. Talk to your accountant about how many years of archive tax records you need to store.
Some Common Deductions
Mortgage interest payments
Property taxes
Donations
Medical bills
Child care
Office supplies & equipment
Business related entertainment
Student loan interest
Click here for a more extensive list of business deductions.
Need help organizing your files for tax time? Schedule your appointment today!
