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Get Organized for Tax Season

There's no need to wait until the last minute to start getting ready for tax season.  Whether your tax return is prepared by a professional or you complete the process on your own, staying organized throughout the year will help make tax time a little bit easier.  Staying organized will also help reduce the likelihood of an error, helping to ensure the accuracy of your return and reduce the risk of an audit.

As tax deadlines approaches, we always hear clients say, “I’m trying to get everything together!”  Many tax payers have large amounts of documentation and information to gather for the preparation of their annual tax return.  Some of these items only come around every few years and are easily forgotten or overlooked.  For example, most people don’t buy or sell a home every year, but your Settlement Statement or Closing Disclosure documentation is important information to include on your tax return.  Other times clients will receive excessive documentation from a company and they are unsure which pieces are necessary.  If you have investments, for example, you probably receive monthly statements as well as an end of year statement.  You should also receive a Consolidated 1099 – that’s the only document truly needed for your taxes (all pages, not just the cover sheet).  Additionally, if you have multiple investment accounts, you will receive documentation for each individual account and they may not be sent out at the same time (even if they are with the same company).  This leads many clients to believe they have received everything when, in fact, they are missing important information.

How can you make tax season organization easier?  The simplest way is to have a designated folder – either physical or electronic.  When documents are received they automatically go into the folder.  If there are two tax payers in the home, make sure both spouses know about the folder and its location.  It won’t be effective if one partner is putting documents in the folder while the other is placing them in a drawer somewhere else.  Take your organization a step further by including a checklist with your document storage.  “It’s not something most people want to think about, but if you take a few minutes after filing your taxes to go ahead and make a quick checklist for next year while the information is fresh, most clients find it goes more smoothly when the time comes to get organized,” reports Chelsea, Levesque & Associates Office Manager.  “It’s as simple as W-2, 1098, 3 investment statements, childcare, home office, mileage, donations, etc.  Making note of what you needed for your return this year will help guide you as you gather information next year.”

If you’re feeling like an organization pro, leverage technology!  SmartVault is a secure storage solution that is free to Levesque & Associates clients.  With more companies starting to deliver information electronically, it’s simple to upload the documents to your personal vault.  When tax season begins, much of what you need will already be available to your accountant without you having to lift a finger!  Paper documents that you receive can be scanned and uploaded thereby reducing the need to store (and potentially misplace) paper.  Don’t have a scanner?  No problem!  Tons of scanning apps exist for Apple and Android devices.  Check out a list of a few here.

If you don’t have access to SmartVault, electronically storing your documents and information is still a great way to reduce any potential headaches when it’s time to get ready for tax season.  It minimizes, and sometimes even eliminates, the need to locate paperwork.  Additionally, it’s ready to be sent to your accountant via email or through another form of electronic uploading.  Look into secure storage options like Dropbox or Google’s OneDrive.Not all information needed for tax purposes comes as a document mailed or emailed to tax payers.  Many people will have business expenses, mileage, home office costs, and more.  “I always tell clients to keep receipts in case the IRS comes knocking one day, but so many options are available to limit the storage needs and make tax season go more smoothly.  Apps exist for receipts and mileage.  I personally use them every day.  Other clients choose to track information in an Excel document that they send to me when it’s time to prepare their return.  There are also many affordable bookkeeping programs available for those who require a more robust solution for tracking information,” stated Conrad Levesque, CPA, Owner of Levesque & Associates.

Whichever method(s) you choose for the storing and disbursement of your tax information, spending a little time staying organized throughout the year will make your life much easier when tax season comes.

Questions about your documentation needs or interested in accessing your personal Vault?  Call or email us - we’re happy to help!