Eeek! April 18th is fast approaching. (Yes, the deadline to file federal tax returns is Tuesday, April 18th this year)
We know, we know. We dread it too.
But you can eliminate some of the stress of tax prep by creating systems that keep your tax documents organized and easily accessible.
We share some organizing and storage tips for your electronic files and physical files below and encourage you to implement these tips throughout the year so you’re not scrambling the night before.
Your tax advisors will thank you.
Electronic Files
Use A Cloud Based Storage Service
We recommend using a cloud based storage service (like Google Drive, Dropbox, OneDrive) so the files can be easily accessed without needing your computer. Plus it makes it easy to share files with your accountant or if multiple people are contributing to the files.
Create Subfolders
We do not recommend cresting one folder for all tax files. Instead create subfolders within the main folder (labeled by tax year). Your subfolders can be categories like receipts, tax forms, deductions, invoices, charitable contributions, etc.
Use A Naming Convention
Consistent naming conventions for the files are key. We like to use something like this “Year_last name_category_subcategory”. This makes sorting and locating files a breeze.
Download A Scanner App
Using one of the many scanner apps speeds up the prep process. We’ve been using ScannerPro for years. Scan the document using your phone and upload to whatever cloud based storage program you use.
Update Regularly
We also encourage clients to update this folder monthly or quarterly (depending on your lifestyle and need) so you are not scrambling at the last minute come tax time.
Physical Files
Use An Accordion File Folder
If you prefer physical files, grab an accordion file folder and dedicate it solely to tax files for that year. Label the sections of the accordion file (ex. receipts, tax forms, deductions, invoices, charitable contributions) and file the documents as they come in.
disclaimers:
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