Keeping organized tax records is one of the best ways to ensure that your tax preparation goes as smoothly as possible. Whether you’ve gone paperless with your bills or still prefer to keep paper documents, making sure that you have a specific organizational system can make all the difference in the tax preparation process.

Saving Receipts

The first step to organizing your tax documents is to figure out which ones to keep. For instance, taxpayers should always keep monthly bank and credit card statements. However, it is not always clear which documents should be kept and for how long. For instance, a business owner will want to preserve receipts documenting the purchase of office equipment or a company car for as long as they own the property or item. Generally, experts recommend hanging onto receipts for seven years, although most do not need to be stored this long.  

Paper Documents

Although many bills are now paid online, it is still important to have a file system where you can store paper documents. It’s also a good idea to separate documents according to type. For instance, a taxpayer may want to have one file or one box that is used only for income-related documents. Binder clips and accordion files are also a good way to ensure that all similar documents are kept together, which can save the taxpayer a significant amount of time in the long run. Many taxpayers are concerned that the ink on their paper receipts will fade. One way to combat this is to make copies of printed receipts and file those away. While you should probably hang onto the original receipts as well, it is less important that they are organized because they are essentially only there for backup purposes.

Going Paperless

For the taxpayer who wants to cut down on the number of paper documents, he or she has to store, going paperless can be a highly effective method of organization. For instance, a number of banks and credit card companies permit customers to download their receipts and records onto their computers. Taxpayers can then create backup copies and organize each record by type in separate files. Paper documents can also be scanned and stored as PDF files. All digital files must be stored in a secure place, such as the “cloud” or Dropbox. This ensures that even if a taxpayer’s computer crashes, he or she will still have access to their records. In many cases, online records can even be exported or transferred into tax software when it comes time to file.

Contact us Today to Speak With a Member of our Experienced Tax Preparation Team

To learn more about organizing your tax-related documents, please contact the CORE financial team today by calling 918-477-7650 to speak with someone at our Tulsa office, 405-720-1244 to reach someone at our Oklahoma City office, or 580-353-2376 to speak with a member of our Lawton team.