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Organizing Tax Records

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Organizing tax records may not spark excitement with you. If you have already filed your taxes you are ahead of the game. Is that you or are your still gathering all of your tax information together? I used to spend lots of time searching for records and look for missing documents that we needed. I did a few things to streamline the record keeping process and I am sharing these tips with you.

I originally posted these tips two years ago, and they have been updated with a few additional items.

This time of year is the time to pull together tax records for our tax return. A few years ago, this step would have taken me hours to do, but now it takes very little time. I still have to summarize information and gather online receipts and bank information, but thanks to some planning, it is quite easy.

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When we were first married, we did not have many records to worry about. Just our employment earnings statement and a few financial forms. But as the years went on and our family grew and we bought a home, incurred loan expense, and acquired financial assets, the need for an efficient filing system became apparent. So today I share a few tips on organizing tax records.

Tips to Organize Tax Records

I set up files for the following categories:

  • Income
  • Medical
  • Real Estate
  • Financial Institutions
  • Child Car
  • Loans
  • Business Receipts
  • Donations
  • Blog
  • Retirement

I keep all my information in file folders and file the information when it comes in. Once I started this, it became easier to do and then it became a habit. By doing this soon after the expense occurs, I save a lot of time not having to pull all the information together from a big pile or box at the end of the year.

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If I receive an online receipt, I file it in my email “receipt” folder, by type.  At this time of year, I print out the receipts from that folder so that I have a hard copy for my files as a back up. By setting up email folders for invoices and receipts by year, everything is right where it belongs. (For more information on how I organize email, click here).

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How Long to Keep Tax Records

I keep these files in a file cabinet and hold them for seven years. I keep hard copies of my tax information for the IRS recommended retention period. You will want to keep your records for the recommended number of years for your situation. Some financial records (investments, retirement, etc) should be kept longer.

If you have a personal scanner, you can save room and time by keeping these files electronically.

Depending on your situation and organizing preferences, you may be able to fit the information in an accordion file or file box. If you do not have a system in place, now is the perfect time to start one.

Do you have your tax information organized? How do you organize your records?

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Paper Organization - Organized Island

Thursday 26th of November 2015

[…] Preparing for Tax Time […]

Sarah Palmer

Sunday 29th of March 2015

Thankfully my husband is a finance guy, so he does all of our taxes...and enjoys it! I just started working from home, though and have wondered what I needed to keep and how to do it. Thanks for this helpful post! Thanks for linking to Tips & Tricks! I pinned this to our Tips & Tricks board!

Tamara

Saturday 21st of March 2015

We use file folders for everything! It comes in handy because papers tend to clutter up around here and there are little chocolate-covered kid hands everywhere. Ah, tax time. Always an interesting time of year.

Raquel

Sunday 22nd of March 2015

Love the chocolate-covered hands. It is definitely not my favorite time of year, but chocolate would make it better for sure!

Gracielle

Thursday 19th of March 2015

I keep tax files organized in bins and maintain spreadsheets on google docs that I update throughout the year. I just started doing that last year and taxes this year were a breeze! Great tips, Raquel!

Raquel

Friday 20th of March 2015

Way to be organized with spreadsheets Gracielle! It makes it so much easier to keep all the information organized all year round.

Akaleistar

Thursday 19th of March 2015

Great tips! I keep my records in an accordion box and have separate folders for receipts :)