One of the keys to making your tax return as easy as possible is to organize all your important documents throughout the year. Then, when you go to do your return, you don't spend hours hunting down the right slip of paper. We keep all of our records in a filing system in my desk at home, but here's a different suggestion from Money magazine on how to organize your tax files for 2007:
Many taxpayers may have settled for the standard write-off because they didn't have the proper backup for deductions. The answer: Get a shoebox or large folder [such as an accordion file], and as soon as you get any document that might be useful at tax time, throw it in. Include:
- Your real estate tax bill and mortgage interest statement
- Receipts for charitable contributions and unreimbursed business expenses (including travel and entertainment costs)
- Brokerage statements documenting investment losses.
If you haven't started doing this yet for next year, now's the time to begin -- while tax season (and the pain of going through it) is fresh in your mind. Maybe the thought of avoiding several nightmarish hours will spur you to set up a simple system like this. ;-)
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