There are two approaches to taxes: you can either make it hard on yourself, or easy on yourself. Most people who end up stressing about meeting the April deadline and panicking as they face the stacks of paperwork aren't properly prepared. But those who put a little forethought into getting organized before they file find that it's not so bad - though getting a refund will always make the effort worth it.
While it's true that the task isn't made any easier by the complex tax forms and confusing instructions that come from the government, having everything you need close at hand will definitely simplify the process. If you've been putting off filing, use this checklist to make sure you have the necessary documents, information and supplies to make filing your taxes as stress-free as possible.
1. Do a document round-up. Doing your taxes requires you to know a lot of information that might not be accessible off the top of your head. You'll want to have a tally of how much you gave to charities over the past year, any paperwork involved in buying a car or a home and any information that might pertain to tax breaks. It can also help to have bank statements from the past year handy, in case you need to double-check any numbers.
2. Collect the forms you need. Your employer, your bank and your mortgage company will all be sending you tax information - make sure that you have all of the documents filed together. When it comes to choosing which tax form to use, remember that simplest is best. For most Americans, form 1040EZ or 1040A will be the applicable options.
3. Make sure your office is well-equipped. Having to hunt down a stapler, go out for printer ink or find a paperclip is an unwelcome interruption in the tax-filing process. Stock your home office, or the area where you'll be working on your taxes, with all the essentials, from address labels to scissors, pens, envelopes and stamps. Make sure your printer is stocked with paper and ink for the printing you'll need to do.
4. Find out what you need to save - and what you can throw away. It's easy to feel overwhelmed by a tide of paperwork during tax time, and it's only natural to want to throw some of it away. But before you start tossing and shredding, remember that you might need some of those documents in the future. Keep these rules of thumb in mind:
* Tax records - seven years
* Bank statements - one year
* Credit card records - until paid
* Home purchase and improvement records - as long as you own the property
* Investment statements - until you sell the investments
* Receipts for large purchases - until you sell or discard the item
* Social Security statements - shred the old statement when you receive a new one
* Insurance information for home, car, etc. - until you renew the policy
Remember that when you're organized, doing your taxes is faster and easier. And once you've got it all completed, keep these tips in mind for next year, so that you'll be even better prepared when tax season rolls around again.
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