How to Get Organized for Next Tax Season

This year’s tax filing deadline was last week. Hopefully your taxes have been filed and now it’s a matter of clearing those random documents that are scattered about. The ultimate goal should be to have a simple and effective system for collecting each year’s tax documents. This system usually evolves over time and can be paper, digital or both. I find it helpful to assess what worked well and what didn’t immediately after my filing has been done. This way the good… and the bad is still top of mind as I figure out a better approach where needed. Here are some other suggestions for how to get organized for next tax season.

Did you use a checklist?

Having a checklist detailing all the documents that will be needed is a good place to start. It will guide you as all the relevant information is gathered and organized. This can be especially helpful if are collecting both personal and business documents. As I’m adding information to my paper or digital folders, I make sure to update my checklist so that it accurately reflects the documents that my accountant will need.

Did you have digital copies of all documents?

While there are tax documents like 1099’s or w2’s that aren’t available until the tax year ends, there are other documents like receipts that are received throughout the year. Having a process set up to scan and file documents as they’re received, greatly minimizes the work to be done when it’s time to hand off info to your accountant.

Did you have an organized digital filing system?

With more tax documents delivered to accountants electronically, it is important to create a simple digital filing structure. This will make it easy to quickly file and find documents that need to be uploaded to your accountant’s secure site. Depending on the size of your business, you could have one main folder for taxes with sub folders or a number of tax related folders under your finance folder. In either case, you’ll want a place for copies of your filed returns, tax documents like bank and credit card statements, payroll returns, and other information as needed.

Did you have a timeline for collecting documents?

Setting aside time to briefly assess your tax information in January will be beneficial.  Once you know what’s missing, you can schedule time to start collecting this information. Create a simple timeline detailing the tasks to be done so that you avoid the last-minute crunch. Then block small chunks on your calendar so that you keep chipping away at these tasks.

Even if you filed an extension, review these suggestions and start thinking about the small changes that you could make that will have a big impact next tax season. If you have questions about how to get organized for next tax season, reach out.