A Simple Way to Organize Your Tax Records
If you don’t already have a method of organizing your tax records for the year, this might help:
Make three folders labelled:
2014 Deductions / Adjustments
2014 Income
2014 Other
During the year as tax documents arrive, just throw them into the right folder.
Deductions / Adjustments (anything that goes on Schedule A or the front of the 1040 as an adjustment to income)- medical and dental expenses
- taxes — state income, property, vehicle
- charitable donations
- job and miscellaneous
- IRA contributions
- educator expenses
- student loan interest
- tuition and fees
- any other adjustments or deductions
- statements about investment income (capital gains, interest, etc.)
- bank account interest
- W-2 statements
- alimony
- pension and annuity income
- real estate income
- social security benefits
- unemployment compensation
- any other reportable income (gifts don’t generally count as taxable income)
At tax time, your documents will have some basic organization; preparing your return will be easier.
Unfortunately, paying your taxes is still hard.