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How to Organize Your Paperwork Before Tax Time

Kate Furlong




Now that we’re well into February, tax time is officially closing in. But if you haven’t started looking at your taxes yet, don’t worry, you’re not the only one. Sometimes just the thought of having to sit down and get everything organized is enough to keep you from getting started. However, if you plan ahead of time, actually sitting down to do them is really not all that difficult.

You’ll have to decide whether or not you’re going to be using a professional tax preparer or using software to file them yourself. Either way, you’ll need to get the same paperwork in order. If you are using an accountant, he or she may have a specific checklist for you to use. If not, here are a few of the key things you’ll need to get in order before you start the process. And, remember, make sure you don’t file before you have all of the forms that you need for your specific tax situation, as this will lower the chances of you having to amend your return.

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Income Tax Forms. First and foremost, you’ll need to report how much money you made last year. This will usually come in the form of a W-2 form that your employer sends to you. However, if you or your spouse had some side income, such as freelance work or a part-time gig for a smaller company, you may also receive 1099-MISC forms.

Investment Tax Forms. If you hold investments in a taxable account, you’ll owe taxes on your investment income as well. Dividend and interest income will be reported on tax forms that your brokerage sends you and will come in the form of a 1099-DIV or a 1099-INT. If you converted any of your traditional retirement accounts to Roth accounts last year, those will also trigger forms from your brokerage for taxes owed.

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Tax Forms for Deductions. There are quite a few tax forms that you may need to keep an eye out for, depending on your specific situation. For example, if you own a house and are choosing to itemize your deduction, your mortgage company should send you a form detailing the interest you paid last year. Or, if you or your child is in school, you will receive a tax form from the institution for tuition paid because you may be eligible for education credits. Make sure you have all of these handy as they can be very valuable come filing time.

Supporting Documentation. Depending on what type of deductions you may be eligible for, you’ll want to have supporting documentation. For example, if you’ve contributed to a 529 plan for your children’s college education and your state allows you to deduct it, you’ll want to have a printout of the contribution available. Additionally, if you are self-employed, you may have other documentation such as miles driven, fees paid or other business expenses that you are planning to deduct as a cost of doing business. Having these on hand now will help make them easier to find (and help you keep calm) in the event that you were ever audited.

Sharing Account Information. Manilla’s Bill Share feature allows you to co-manage your accounts and bills with your spouse, partner or accountant. Communication among parties saves time and makes tax season less stressful.

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As always, if you have questions about your tax situation, it’s best to contact a certified accountant. Although you may be hesitant to pay someone for something you think you can do yourself, you’ll be glad to have the backup in case of an audit or to help you handle complicated situations.

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