Managing Your Tax Records After Filing Your Taxes

Tax Tips

Closing the books on another tax year is always a great feeling. You’ve either received your tax refund or settled the score with Uncle Sam, so you sit back and relax until next year, right? Well, not entirely. While most of the hard work may be over, it isn’t the time to simply toss everything into a folder and tuck it away into a filing cabinet.

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Staying organized, even after your taxes have been filed, will make your life a lot easier in the future. Have you ever found yourself looking to buy a home, refinance your mortgage, or buy a car and get a bit of an uneasy feeling when they ask for tax returns, W-2s or other related items from two years ago?

You know you have them, somewhere, but tracking them down might take some time. When you have organized tax records you won’t find yourself in this predicament.

Here’s what I like to do. First, I create a primary folder for each tax year in my file cabinet. This folder will hold everything that’s related to that particular tax year, including a copy of that year’s tax return.

Then within the main folder I create three sub-folders. One for income documents: W-2s, 1099s, rental income, etc.  Another for expense documents: property taxes, mortgage interest, student loan interest, and any other expenses or expense related tax forms. Finally, a folder for receipts.

The benefit of this method is that on a moment’s notice I can find virtually any document in a matter of seconds. If the bank wants a copy of my wife’s 2009 W-2 and the Schedule C for my business, I know exactly where both of those are. No fumbling around through a bunch of paperwork trying to find a needle in a haystack.

More Than Organizing Past Tax Records

Don’t just stop at organizing all your past tax documents. While that is helpful and good practice, it’s also time to start thinking about organizing documents today with your future tax return in mind. This is especially true if you have your own business.

Paperwork tends to pile up quickly and as a busy business owner it’s easy to put paperwork off until later. Then tax time rolls around and what happens? You’re sorting through a mountain of statements, bills, and receipts, and it ends up taking you more time gathering the necessary paperwork than doing your actual tax return.

So, get your paperwork organized before tax time. Even if you don’t immediately have a need for last month’s bank statement or the receipt for printer paper, don’t just tuck it away until later. Have a place, whether it’s a folder, bin, or box, to separate and contain all of your income and expense documents.

You don’t need to worry about organizing every single thing as it comes in, but at least put it into its appropriate pile immediately. You’ll eliminate desk clutter and you’ll save a bunch of time when tax time rolls around.

Comments (1) Leave your comment

  1. I need a copy of my tax return I filed with you last year. I do not know how to get a copy sent to me via email. Can you help?

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