Organization is a great thing to have in your life, but when it comes to your taxes, it’s something you might do well to consider a requirement. When you keep your taxes in order, it means you avoid unwanted encounters with tax collection agencies, not commonly known for being the most pleasant orders of human beings. Not only this, but keeping your taxes organized actually saves you a great deal of money in the long run. When you present your taxes properly and arrange them smartly (often, this roughly translates to, “with the help of a professional”), you can even wind up benefiting from things like tax refunds or rebates, plus deductions and other such pleasantries. Taxes don’t have to be the worst thing in the world if they’re gone about properly, and with a few easy steps you can do one of the most important things in the process of doing this — keeping your taxes organised. We’ll talk about the five most brilliant tips for keeping your tax records well-organised so that when tax season rolls around next time you’re prepared and ready to make the most out of your return opportunity.
1. Create a System. Get your taxes in order and make sure there’s a system in place by which you intend to do so. Make guidelines, and write them down if you have to. Especially if you’re the type that has trouble remembering what they are, or even to apply them in the first place. When you have a defined system of organization, you’ll be able to give yourself something concrete to which you can adhere, which means you’ll ultimately have a much easier time keeping things organized in the first place.
2. Keep Your Tax Records for the Last Seven Years. Most tax collection agencies will want to look at your records for the last seven years if they think they’ve noticed anything irregular and decide they want to perform an audit of some kind. If anything happens and you’re records are requisitioned, you’ll need to have them for the last seven years. Something like this also goes a long way towards showing that you’re confident all of your records and information is in line.
3. Be Meticulous. Keep track of absolutely everything. If your tax situation includes something like a home business, then make sure you’re keeping receipts and records of every single business-related transaction. If you’re deducting things, or claiming others as dependent, you need to make sure you have incredibly thorough documentation of everything that happens. The earlier you start practicing this kind of habit, the easier it is to keep up.
4. Keep Like with Like. When you’re organizing everything, make sure your system sees everything grouped together. This might seem like common sense, but you’d be surprised how many people make this mistake when they organize things like documents and receipts and records. Keep things collected together so you have an easy time navigating your records.
5. Go Digital. Adapting to the newest technologies will only help you be more organized and on-target with your taxes. Think about sorting through papers versus typing your query into a search bar. Whether it means getting something like the NeatDesk, which scans and digitizes all of your documents, or using a website like http://www.taxcreditscalculator.co.uk/ — there are many, many ways to go digital in your tax efforts for ease and organization.