Sections

Weather Forecast

Close
Advertisement

Getting organized at tax time

Email Sign up for Breaking News Alerts

money management Detroit Lakes, 56501

Detroit Lakes Minnesota 511 Washington Avenue 56501

During the last month, many taxpayers probably received a flurry of important tax-related documents in the mail. They serve as a reminder that the deadline for submitting tax returns is looming ahead on April 15. Do you have everything you need? Getting tax returns done can be stressful, but the Minnesota Society of CPAs offers this advice on what can be done to better ensure that returns are completed on time and accurately. They also offer tips on ways to plan ahead to take some of the stress out of tax time next year.

Advertisement
Advertisement

Get organized

By the beginning of February, organizations should have sent many of the documents needed to complete tax returns. This will include a W-2 from employers showing what's been earned this year, forms 1099 reporting any additional earnings and investment income received and statements from mortgage companies, bank or other lenders with details needed for returns.

You may also receive other paperwork, documenting medical bills paid and charitable donations or financial investments you have made. CPAs recommend that you set aside all of this material as soon as you receive it in a special folder or envelope so that you don't have to search for it when you're ready to do your return. In addition, find last year's tax return so that you have it handy for background information and to see what further documentation you need based on what was used last time.

Make order out of chaos

Gathering your documentation is a good first step, but it's also important to put it in workable order. Sort the paperwork into different files or folders based on whether it relates, for example, to income or deductions. Take statements and papers out of the envelopes in which they were mailed so they are easier to identify and access. You might also want to make a list of the documents you have and the amounts involved in each case. That will make it easier for you or your CPA to get a timely start on your tax return.

Prepare all year

Not all of the documents required for tax returns will come in the mail in January and February. For example, credit card or bank statements and records of cancelled checks that were receive during the year that show purchases or transactions may be needed. You might also use receipts that verify items you're deducting or donations you have made. You should also set aside documents relating to major events during the last year, including the closing documents and mortgage information for a home purchase. That's why it's a good idea to create a tax file for next year today, to gather the material you'll need for next year's return now. As you gather this paperwork, remember, too, to ask your CPA about any tax savvy steps you can take now to reduce next year's tax burden.

Advertisement
Advertisement
Advertisement
randomness