In today’s world of booming technology, we have access to all kinds of tools that can help make our lives just a little bit easier. It’s even simpler to get organized and save stuff we may need later with the tap of a button. And for a day like Tax Day, we can certainly put this technology to good use. Easy-to-use apps like Paper Trail and Shoe Boxed make it easier than ever to store and save receipts and other financial records all in one place using your smartphone.
Using apps like these throughout the year makes for a much easier and stress-free Tax Day. But if you’re like many of us, you may not know about these apps and all your receipts are scattered about in drawers, cabinets, pants pockets and the glove box of your car. Now, if signature loans have been the go to for settling last year’s financial emergencies, then you probably want to get the most out of your tax return this year. Not to worry, because here are some tips on how to get organized for this upcoming Tax Day (April 17th).
To start, you’ll want to gather up all the documents you can find and begin organizing them. Everything from last years’ tax forms, business-related expenses and paycheck stubs should be included. Don’t worry about any missing documents. A good way to start organizing for Tax Day is to grab what you can readily find and go from there.
Next, when sorting through your pile of paystubs, tax forms and bank statements, you should ask yourself, “Do I still need to hold on to this?” If existing insurance claims, assets sales or investments are leaving you a little confused as to what to keep and what to ditch, you may want to speak to a professional. If nothing else, always make sure to hold on to your IRS documents. The IRS’s statute of limitations for audits typically has a 3-year timeframe. After that, you’re safe to ditch those records, too.
The experts recommend that you sort your financial records according to how soon you’ll need them. Whatever is most recent, you should file front and center, then work your back from there. Also, it’s always a good idea to digitally scan your documents to a hard drive in case of a flood or a fire. After you’ve filed your taxes, you can safely discard the following financial records: paystubs, bank statements, investment statements, loan statements and receipts. Anything you no longer need but may need in case of an audit should be archived. Remember, the IRS has a 3-year period for statute of limitations on audits.
Be sure to categorize the files you’re keeping so you have easier access to them when the time comes to file. Now that you have everything cleaned up and organized, go ahead and ditch whatever is left over. The less clutter you have now, the easier it will be to prepare for future tax filings.
If you want to avoid the need for signature loans this year, maximizing your tax return could be a big step towards avoiding those unwelcome financial emergencies. To get the most out of your tax return, the first step is to make sure you have everything you need to file. Take the time now to rummage through whatever financial records you have laying around the house and get them ready for sorting. It may seem like a daunting task now, but it sure beats scrambling around at the last minute on Tax Day.