Prepping for Tax Time

I realize it's a bit early for most people when it comes to preparing for tax time. However, when your paperwork is organized, it can be done in a snap!

Since 2013 is done, it's a great time to cull your files and purge what you won't need for taxes and 2014. Go through each file, one at a time to assess it's contents. First pull out any information you'll need to complete your 2013 taxes. Ask your accountant/lawyer/tax preparer what exactly you'll need (These ideas are all examples and your situation may be different. Believe it or not, my word is not law!). But, a good rule of thumb is that if you were audited, what would you need to prove your income, deductions and expenses? Set these items aside in your 2013 Taxes folder or file.

Once tax items are pulled out, assess the file for anything you can now get rid of simply because enough time has passed. Anything no longer relevant or expired should be recycled or shredded. If you have files for utility bills and financial accounts, most of these papers can be shredded, as well. For example, unless there is a dispute with your service provider, you don't really need copies of the past year's utility bills. Unless the statements prove something you need for tax purposes, banking statements from checking, savings and credit/debit cards might also be eligible for shredding at the end of the year. Investment accounts should be sending a year-end statement. Some will even provide 1099s. These year end documents should likely be saved with your tax papers. Once you have those, and there are no disputes to it's contents, the monthly or quarterly statements you received during the year might also be added to the shred pile.

Now that you've pulled out anything no longer useful (think about it - when was the last time you really needed to check an electric bill from 12 months ago?) your files should be nice and empty - ready to take on 2014. Thankfully, as a side benefit, you've also managed to collect (hopefully) most of the paperwork you'll need for taxes this year. Hooray! Fingers crossed for a nice, big refund!

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