Organizing Tax Information Part 1 – All the Forms You Get in the Mail

I wanted to take a little time to do some posts on organizing your tax stuff, because I think one of the a main reasons people hate doing taxes is because they get overwhelmed with the stacks of paper and forms. So I’m going to explain the system that I have for organizing my stuff, and hopefully it will be of some help to somebody out there.

This first part will deal with all the forms that come in the mail because everyone has to deal with them, and then in the next day or two, I’ll explain my system for dealing with receipts that you keep up with yourself in order to take deductions (for small businesses, donations, and whatever else you have).

Generally the tax forms begin coming in the mail at the beginning of January, and you should have all of these by February. If it appears that you’re missing something, then you may want to contact the company that you’re missing stuff from and find out what the deal is, but generally you can expect to get all your forms fairly early, and if not, then you may also want to check online. My credit union and one of the companies that I had a student loan through had our statements online to print out.

Whenever I start getting my forms in the mail, I immediately get a out a file folder and label it “Taxes” and I write the year on it. I place all my forms in this folder as they come in the mail, and eventually after our taxes have been submitted/filed, I keep all my forms and printouts/copies in this same folder and file it in the filing cabinet at home.

Once I feel that I have recieved all the paperwork in the mail and am ready to file our taxes, I go through the folder and open all the evelopes and I separate the forms into groups. Generally they are grouped into two stacks. One stacks is Incomes. This includes records of our wages, student loan and scholarship disbursements, accrued interest on our savings accounts, etc. I attach all these forms together with a paper clip, and place a post it on top of the stack, labeled Incomes.

My other stack is for Expenses Paid (or whatever you want to call it…I don’t call it deductions b/c I have several different kinds of deductions, which will be discussed in the next post). Anyway, this is for forms that we get, regarding interest that we’ve paid on student loans, tuition that we have paid, and that sort of thing. Again, I clip all of these forms together with a paper clip and label the stack with a post it.

Of course, you may have other forms that come in the mail as well, which you can group any way you like. You may also want to take it a step further and do individual stacks for you and your spouse or other people in the house as well. Or you may want to separate “wage” forms from “bank interest forms,” or put all your “college related” forms together. It’s really up to you. Everyone has their own personal preferences and an idea of what’s logical to them. But this system works for me, it’s very simple.

The bottom line is that it is better to have 2, 3, or 4 stacks of paper that are organized, clipped together, and clearly labeled than to have 10 or 20 random sheets of paper thrown together in a folder. Whether you do the taxes yourself or hire an accountant, a little organization will make the work a whole lot easier.

Next time, I’ll explain my simple system for keeping up with business expenses and other deductions throughout the year. A lot of people don’t take deductions because they either lose their receipts, or they think it is too much trouble and hassle to keep up with receipts and keep a record of their deductions. (but it doesn’t have to be a hassle!)

Hope you’re all having a good weekend. See ya next time!

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