It is can be easy to accumulate and save information that will help when your tax return is prepared. Here are some thoughts and suggestions that will save time for you in the future.
First, put all tax related items in one place as the year goes by. It could be a drawer or a folder or a box or even something else. I remember one lady that had several old purses. She put all medical related information on what she paid in one purse. Another purse was used to accumulate all of her charitable gifts information. Yet a different purse saved property tax items, vehicle registration receipts and purchases of special sales tax major purchases like furniture, etc.
Some folks find just a school type spiral binder works for them. They start a page for each type of expenditure. A page for prescriptions, another page for payments to doctors and a different page for other medical expenses. Then another page is used to list charitable contributions. Yet another page for taxes. The binder becomes an easy way to know what was paid for income tax related items and it works for them.
Some folks with a computer, use exel worksheets or even some type of money management computer program.
We urge client with stockbroker accounts to file the monthly reports in a three ring binder. That way the information is saved in date order and is easy to find. If they have more than one account, a binder for each account seems to work well.
It is good to save all paystubs each year. Then compare the last one to the W-2 form. If you are self employed as a real estate salesperson or similar activity, itis important to keep a record of the payments you receive and compare your total with the form 1099-MISC for that year.
If you have a rental, maybe a 13 column worksheet will help you. It can be an easy reference of when you paid the insurance premium, the property taxes, etc. If you use a line for each expense, the total for the year is easy to figure. By doing a separate page for each year, you can compare the results of various years.
The goal is to make a habit of saving the important information in a way that is easy for you. It will save time and help avoid overlooking valuable deductions.
Did you hear “Every change is not an improvement, but every improvement is by change.”