Getting Organized: Creating Your Tax Document Folder

If you’ve just realized that tax filing season has begun and you haven’t prepared anything yet, don’t panic. Today is the perfect day to start organizing your tax documents. With many items now available electronically, there’s no need to wait for paper copies to arrive in the mail. By creating a folder, whether physical or electronic, and compiling important documents, you can streamline the process and ensure a smoother tax filing experience. Here are ten essential items to include in your tax document folder.

1. W-2 Forms: Make a list of all the employers from whom you expect to receive a W-2 form, representing your income from employment.

2. 1099 Forms: Compile a list of all the 1099 forms you anticipate receiving for your freelance or gig activities, such as consulting work or driving for services like Uber.

3. Investment Statements: Create a list of all the financial institutions from which you’ll receive 1099 forms reporting interest income, dividends from stocks and mutual funds, and any capital gains from stock sales or mutual fund transactions.

4. K-1 Forms: If you are a partner in a partnership, shareholder in an S corporation, member of an LLC, or investor in a REIT, make a note of all the K-1 forms you expect to receive.

5. Retirement and Pension Documents: List all the 1099-R and W2-P forms you will receive for any pension, retirement fund withdrawals, distributions from IRAs, or 401(k) plans.

6. Government Benefit Forms: Make a note of any 1099 forms you anticipate receiving for unemployment benefits, Social Security benefits, or state income tax refunds.

7. Mortgage and Property Tax Statements: Compile a list of all the 1098 forms you will receive for mortgage payments, including information on property taxes paid. If you pay property taxes directly, download a record of all payments made during the year from your county website.

8. Business Travel and Per Diem Records: Keep track of all the dates you were away from home for business purposes, as these will be needed to determine per diem deductions. If you stayed in hotels overnight, record those details as well.

9. Retirement Contributions: Note any contributions made to IRAs or 401(k) plans during the year. Additionally, write down the amount you plan to contribute before the tax filing deadline, ensuring you maximize your contributions within legal limits.

10. Estimated Tax Payments: List all the estimated tax payments you made to the federal government and your state taxing authority throughout the year. Remember the typical deadlines: April 15th, June 15th, September 15th, and January 15th of the following year.

Creating a tax document folder and organizing essential documents is a proactive step toward a stress-free tax filing experience. By compiling lists of expected forms, tracking important dates, and crossing off items as you receive or download them, you’ll know exactly when you can start processing your tax returns. Stay organized and make use of electronic options for faster and more convenient tax preparation.