Preparing to file your taxes can be stressful, even if your situation is relatively straightforward. The key to relieving any anxieties is getting organized. This is a smart tax planning strategy that will lay the groundwork for easy access to past records. It can be overwhelming to get started, but there are guidelines you can follow to make the process easier. It starts with establishing a centralized system that works for you. 

Establish a Centralized System

To establish a centralized system for all your tax-related documents, creating a dedicated space or digital folder is key. Whether it's a physical filing cabinet or a digital folder on your computer, having a designated location for your files ensures that important documents won't get misplaced.

Embrace Technology

Digitize your tax records by scanning and storing documents electronically. This not only saves physical space but provides easy access from anywhere with an internet connection. Consider using cloud storage services for added security and accessibility.

Name Your Files

Develop a consistent file naming convention for digital documents, including the tax year and a concise description in each file name. In some cases, it may also be helpful to create separate folders for related documents. This practice simplifies the identifying of specific items when retrieving them.

Organize Personal and Business Documents

If applicable, separate personal and business documents to maintain a clear distinction between these files. This separation not only enhances organization but is also crucial for individuals who own businesses or have self-employment income.

Categorize Documents

Segment your tax-related documents into categories. Common categories include income statements (e.g., W-2s, 1099s), deductions and credits, investment-related documents, and receipts for deductible expenses. This approach minimizes the time spent searching for specific documents.

Maintain a Tax Calendar

Create a tax calendar with important deadlines, such as the filing date and estimated tax payment due dates. This will help you stay on top of your tax responsibilities and provide you with plenty of time to gather the required documents.

Regularly Update and Review

Make it a habit to update your tax documents regularly. Review and update the content of your tax folder as the year progresses, adding new documents and removing outdated ones. This proactive approach ensures that your tax records are always current and ready for filing.

Setting Yourself Up for Success

Incorporating these strategies into your tax organization routine will streamline your annual tax filing process and create a robust system for retaining and accessing past tax records. This level of organization not only eases the stress of tax season but also serves as a valuable resource for future financial planning and decision-making.

Seeking Advice and Assistance

Some businesses and individuals choose to work with a professional to complete the filing process. this level of organization will make the whole process smoother and more straightforward. We can work with you and your tax professional to review your current situation and determine which ideas may be beneficial to you. Contact us today!   

James Artale is a financial advisor located at EmVision Capital Advisors, 251 W. Garfield Rd. Suite 155 Aurora, OH 44202. He offers securities and advisory services as an Investment Adviser Representative of Commonwealth Financial Network®, Member FINRA/SIPC, a Registered Investment Adviser. He can be reached at (330) 954-3770 or at info@emvisioncapital.com. 

This material has been provided for general informational purposes only and does not constitute either tax or legal advice. Although we go to great lengths to make sure our information is accurate and useful, we recommend you consult a tax preparer, professional tax advisor, or lawyer