4 Easy Steps to Prepare for Tax Season



Tax season is upon us, and most of us have been digging through piles of paperwork to find everything needed to file the annual tax return. Whether you’ve already filed or waiting to the last minute, it’s never too later to think of next year.

We’ll leave filing taxes to the professionals, but when it comes to organizing your various documents you’ve come to the right place. Keeping an extensive filing system is necessary when it comes to sorting your bills, keeping track of important policy information, and keeping extensive insurance records.

The first step to getting organized is gathering all the necessary supplies.

For this project you will need:

1. A large file cabinet
2. Hanging file folders
3. Manila file folders
3. Labels
4. Pen or marker

Step 1. Label your hanging file folders for main categories such as automobile, healthcare, and banking information. An example of top level categories is listed below to get you started.

Top Level Categories: 

1. Auto
2. Banking
3. Bills or Loans
4. Healthcare
5. Housing
6. Insurance
7. Legal
8. Retirement
9. Valuables

Step 2. Label the manila file folders for subsequent categories. For example: if you have accounts to 3 different banks you will want a separate file folder for each bank

Step 3. Spread your sub-category file folders on the floor or dining room table and slowly start filing the relevant paperwork into the proper file folder. This may take some time depending on the stack of papers that need to be organized.

Step 4. Once you have all your paperwork neatly sorted into the correct folder, place your file folders into the top category hanging files and store within you new filing cabinet.

To discourage hoarding documents for too long, files should be pruned once per year.

How long to keep records:

Tax records: 7 years
Credit card receipts: 4 years
House documents: forever

Important Documents:

Please remember that some documents should be stored in a fireproof safe or safety deposit box for safekeeping. Examples of these documents are below.

  • Legal documents
  • Birth certificates
  • Marriage certificates
  • Automobiles titles
  • Property deeds
  • Financial investments
  • Copies of drivers licence

Sorting massive amounts of paperwork is a daunting prospect, but with a solid plan, the correct supplies, and some good tunes, you can create a well-organized filing system in an afternoon. You’ll thank us in the event of an IRS audit!