Tax season is upon us and you know what that means; it’s time to break out the filing cabinet and start digging around for all those receipts, bank statements and pay stubs. With the tax deadline quickly approaching, it’s time to buckle down and get a move on. You may find preparing for Tax Day stressful and overwhelming, but by following these steps now, you can make future Tax Days a lot easier. Plus, if title loans have played a key role in helping you tackle some recent financial emergencies, then you’ll want to do everything you can to get back as much as you can this tax season. Here are 4 great ways to prepare for Tax Day on April 17th.
When prepping for Tax Day, step one is to collect everything from your files, including last years’ pay stubs, bank statements, loan interest forms, retirement accounts, mortgage statements and sales receipts from big purchases as well as any other valid expenses and deductions.
While you’re digging through your financial forms, it’s important to keep in mind how long you’ll need certain items so you can archive them after this year’s taxes are filed. Such documents may include insurance claims you’ve made, asset receipts, investments, etc. Remember, the IRS’ statute of limitations for audits is typically a three-year period, so it’s a good idea to keep your records for at least this long just in case.
For obvious reasons, it’s very important to keep your records organized and easy to sort through. Your financial records should include the following: pay stubs, bank statements, investment statements, big-purchase sales receipts and loan interest statements. It’s best to have a paper copy of these documents as well as a digital backup in case the paper copies are lost or destroyed. Once these documents have been kept for over three years, you can safely dispose of them as they will no longer be needed.
Finally, you should have a “trash” pile consisting of anything that has been replaced by more recent copies or items that have surpassed the statute of limitations period of 3 years. The more you can dispose of, the more organized your current records will be. This will make the process of navigating your records for future tax filings much easier and less stressful. It’s also not a bad idea to keep track of what you’ve thrown out so you can be aware of what’s been disposed of and what may actually be missing.
By keeping up with these steps, you can ensure you’ll have fewer headaches on Tax Day each and every tax season. You could maximize your income tax return by hundreds of dollars by leaving no stone unturned where you may qualify for a refund. If you have a tax preparer, it’ll make their job a lot easier and make your Tax Day a breeze.