How To Organize Tax Files

Tax time is here! That means it’s time to get your stuff together, file your tax return and prepare it for storage. If you are not organized, this can be a daunting task, but use it as an opportunity to prepare yourself and make it easier for next years’ filing. The most important thing to do is keep the records you need, and begin shredding the ones you don’t. 

Organizing #Taxes Made Easy. A simple way to #organize #taxes, make filing simple and get conquer the #paper #clutter. via @AConqueredMess

 

How should I organize my tax records?

Starting the year off on the right foot is key. Every January, I start an accordion file. It is labeled with the categories I have deductions for. I deduct business expenses for my husband’s job so I label them the accordion file by category, say “work clothing/tools” or “travel expenses”. You should label your accordion file in the same manner, but customize it to whatever you deduct.

I look through the accordion file every month and write down all my expenses based on the receipts that I have and what I know I spent that can be deducted. I look for any receipts that might be missing at this time. I can easily skip this step and write everything down at the end of the year, but it’s easier to remember if I missed tracking an expense 1 month later, versus trying to remember a missed expense and find the receipt for it one year later. I suggest you do it every month as well, it will save you time in the long run. 

I started my accordion file for 2014, but now how do I organize my taxes for 2013?

I’m gonna show you how to do it my way. To start off, I take my accordion file and type out my deductions list. When I file my taxes, this list and the W2 forms is the only thing my accountant gets from me. It makes her job easier and speeds up the filing process. 

When I get home, I scan everything and make several stacks with it. I add a “cover page” and label it for each stack. You can get as creative as you want but I keep it simple and just use a white sheet of paper and my own handwriting. 

Organizing #Taxes Made Easy. A simple way to #organize #taxes, make filing simple and get conquer the #paper #clutter. via @AConqueredMess

Stack #1 – Label the cover page (YEAR) Income Tax Return, arrange the 1040 and any schedules attached behind it and staple it together. Many times when someone asks to see your tax records, this is all they need. 

Stack #2 – Label the cover page (YEAR) W2 Forms and staple all your W2 forms behind it.

Stack # 3 – Label the cover page (YEAR) Income Tax Deductions and Receipts. Remember my typed out deductions list? This is the first thing that goes behind the cover page.

Organizing #Taxes Made Easy. A simple way to #organize #taxes, make filing simple and get conquer the #paper #clutter. via @AConqueredMess

 Followed by a few extra pages labeled by deduction category, at 3 categories per page.

Organizing #Taxes Made Easy. A simple way to #organize #taxes, make filing simple and get conquer the #paper #clutter. via @AConqueredMess

I staple each category ‘s stack of receipts behind the blank pages, according to where I labeled it. I promise you, it sounds more complicated than it really is. See the photo below. 

Organizing #Taxes Made Easy. A simple way to #organize #taxes, make filing simple and get conquer the #paper #clutter. via @AConqueredMess

Organizing #Taxes Made Easy. A simple way to #organize #taxes, make filing simple and get conquer the #paper #clutter. via @AConqueredMess

As you can see above, the “tools” receipts are stapled exactly behind the word “tools”. Likewise with “clothing” and “rent”. I deduct these things as a business expenses because of the nature of my husband’s job, but you should consult with a tax professional or accountant to figure out what you should be deducting and keeping records of. You can also read more on the topic by clicking around and browsing here: Deducting Business Expenses.

So there you have it folks, the way I keep my taxes organized. Before I do my organizing, I scan everything and keep a digital copy in our safe. I still keep the hard copies for as long as the statute of limitations is alive, then I shred them. In my photos you see 2007’s taxes, but I’ve already shredded that and all the way up to 2009’s taxes. You do not want to become a tax records hoarder, but you also do not want to get rid of your documents too quickly. 

How long should I keep my tax records?

As a general rule, keep your tax records and supporting documents for three years following the filing deadlines. Let’s say you file 2013’s income tax on February 19th, 2014, you should keep those records up until April 15th, 2017. You might say, “But why can’t I just shred them in February?”. Honestly, I don’t know, but I go based on the IRS’s rules. (You can read more about it here: How Long Should I Keep Records.)

PLEASE NOTE: There are exceptions to the three year rule, like if the documents are related to properties (monetary or real), or if you need it for any purpose other than taxes. Also, if you file a fraudulent tax return or you don’t file a return at all, you should probably keep your records forever, as Uncle Sam can come knocking at any point in time. I don’t know much about business taxes because I am not a business owner, but if you are, you can find more information on the IRS.gov website or by consulting with a tax professional.

Hope you’ve enjoyed my post and here is a look at what 8 years of tax records looks like in my home. Before I shredded the ones I no longer needed, of course! 

Organizing #Taxes Made Easy. A simple way to #organize #taxes, make filing simple and get conquer the #paper #clutter. via @AConqueredMess

Want to conquer more paper clutter?

Check out my way of organizing Manuals and Warranties!

XOXO

A Conquered Mess | Keeping Life SimpleDid you enjoy this post? Do me a favor and like ACM on Facebook. Thanks a bunch!

Extra credit: Do you currently organize your tax records, or are they all over the place? How many year’s of taxes are you still keeping that you don’t need? Don’t be shy! I kept 8 years before I realized I could finally shred them! Let me know in the comments below!

Comments

  1. Tammy @ creativekkids.com says

    This is a great system! I’ll have to show it to my husband! Thanks for linking up with the Bloggers Brags Pinterest Party. I have pinned your post to the Bloggers Brags Pinterest Board!

  2. Tamara says

    My goal every year is to have a better system in place so that I don’t dread pre-tax filing preparation the following year. I am going to Pin this & refer back to it. Thank you

  3. says

    Such easy instructions. We’re working now on simply eliminating all the paper clutter in the house. It’s a lot of work, but so worth it. Visiting from SITS. Happy Valentine’s Day.

  4. says

    This is great… you are so organized. I really need to get my documents in order so I’ll be using your tips as a starting point. Thanks!! #sitsblogging

  5. says

    I keep 10 years of tax files. After taxes are done, I put all paperwork in a large shoebox and label “Taxes 2003″. I do ten years, because this year, I will take the 2003 box and shred the contents and change it to “2013”!

  6. says

    This was my Hubby’s first year to file taxes in America. It was an eye opening experience for him. He now appreciates my need to be super organized. Great post. Thanks for sharing #SITS Blogging

  7. says

    I have to say tax time is not my favorite time and this year we have so many things to take in to consideration – deductions, etc. I’m not looking forward to it but I hope I can put some of our organization tips to use. Thank you for sharing.

  8. says

    Thank you for the great tips. up until now, I really didnt have any thing that I could claim.. But since getting married – hubby can claim all his work tools… and We can claim medical (plus a business) We needed a way to keep everything organized! Thank you so much for this!
    #SITSBlogging

  9. says

    The closest we get to keeping our tax papers organized is having a single drawer for all our documents. It’s a start, right :) You give some great ideas and I am going to try to implement them in 2014! It’s still early. Glad I found your site, as I’m always fighting the paper beast! #SITSBlogging

  10. Angela @ The Southern Fried Bride says

    So nice to come across you and your blog through SITS! Thank you for the inspiration in this blog post.
    #SITSblogging

  11. says

    Wow! This is certainly organized! All of our stuff for the past 5 or 6 years has been digital, but I might still have some old tax information that I might need to go back through and organize. Thanks for sharing these tips! Stopping by from #SITSblogging comment love!

  12. says

    We’ve already received our Federal return this year, but I file everything in a manilla envelope labeled by year. We don’t do the home office deduction anymore so I don’t have to worry about keeping our “business” receipts since my husband no longer sells on Ebay. I actually keep my taxes for 10 years, which is well over the IRS regulations, but I’d rather be safe than sorry.

  13. says

    I admire people who are so organized. My taxes are pretty simple since I don’t own anything nor have much money. Kidding! Sort of…but seriously, I will definitely be checking out more of your organization tips.

  14. says

    I’m completely in awe of your organizational skills! All of my tax stuff is tossed into one folder that’s just labeled “TAXES 2013.” Thankfully there’s not too much paperwork or else I would be in trouble.

    Do you have a recommendation for a good safe? That’s on my list of things that I really need to purchase but just haven’t gotten around to it.

  15. says

    I am so unorganized! I just have my taxes thrown in a drawer!

    I think I will be buying some large manilla envelopes after reading this.

    Thanks for sharing, Alma!

  16. Carrie says

    Wow, you are definitely A LOT more organized than I am! I am almost done with my taxes – excited to get some money back this year. #SITSblogging

  17. says

    I have a really similar system! Ever since I started my accordion file right at the top of the year, it’s been SO much easier come tax time.

    Love your blog layout, BTW.

  18. says

    I’ve been trying to remember expense from last year. This year I’m off to a much better start and I’m putting everything in a spread sheet. I’m not in a hurry to do my taxes this year though. I keep remembering stuff I forgot. If I wait long enough I’ll remember everything, I hope.

  19. says

    Tax time is probably one of my favorite times of the year. I’m a finance and paperwork nerd! I tend to keep a manila envelope, labeled by year, to gather all my receipts for the year. A couple of months before filing, I sort them, and create a spreadsheet to see if there’s enough to itemize. If so I calculate the breakdown in the spreadsheet. Works well enough for us, but we haven’t had excessive amounts of receipts or paperwork to sort. I have all my tax returns from 1999! All in envelopes in my filing cabinet. I’ve had to reference a few old ones for various reasons, so it’s helped to have them on hand. #SITSblogging visit :)

  20. says

    Okay, that was so helpful! I’m impressed how organized you are. This is my second year filing as self-employed, so I’ve been keeping all my receipts and keeping track of them in a spreadsheet, but this seems way more organized and helpful. Thank you for sharing!!

  21. Amanda - A Cookie Named Desire says

    Thank you for sharing this! I am such an unorganized person and taxes are especially daunting because of this. I am pinning this so I can go back and work on my organization for this coming year since I think 2013 is a lost cause. I am still scrambling to find everything I need to file!

  22. says

    Great info I keep mines for 8 years just in case I feel so bad getting rid of them and as soon as I do someone needs it. Stopping over from SITS

  23. says

    All good tips, it’s important to keep that running record all year long so you’re not frustrated come tax time. I’ve been very good about that thus far (knock on wood). :) #SITSBlogging

  24. says

    I have a file folder per year, and stick things in there as they arrive, or as I acquire them the year prior. Now that I’m married, my husbd’s file-system of “just leave it in the envelope somewhere” is jacking that up. I see an accordian file in my future. Thank you!

    #SITs

  25. says

    I love your method! I’m very organized when it comes to our taxes, but I do taxes for family and friends as well, and the piles of paperwork they drop of to me can be very daunting to say the least. I think teaching them your method of organization would save us both a lot of headaches! Thanks for the information :)

  26. says

    Quite honestly I am thrilled that my husband organizes all of this, as I would make a complete mess of it! But I am pinning for future reference, just in case. Thank you! #SITSBlogging

    Alison
    Nancherrow

  27. says

    Love the “paper advice.” I’m always looking for new ways to organize the armies of paper that march through my life and so I especially appreciate the time and effort you put into making this tutorial. (SITS Girls)

  28. says

    This is great–thanks a bunch for sharing your method! I really need to try something like this. I’m also going to have a look at how you organize manuals and warranties.
    #SITSblogging

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