Tax Organization for NEXT Year

Tax Organization for NEXT Year

Avoid the Stress you are feeling right now

This time of the year, accountants everywhere are advising that you need to have your documents to them by March 1st. Are you feeling stressed? The alternative is filing an extension, procrastinating until early October, and then really having to buckle down and get it done. And, you still must pay the expected amount in April plus (usually) an extra fee to your accountant. Sound familiar?

Want to know a better way?

2023 Tax folder

I have only ever had to file an extension once, and that was because my accountant put our return on the back burner for too long.  Here is how I typically manage the tax project…all year long.

Create tax folders early.  Towards the end of any given year, I create a tax folder for the next year, so now I have a 2023 folder started.  More and more information is coming electronically, so I have a physical folder into which I throw any paper as it arrives, and, a folder on my computer for 2023 also.  That one has a number of sub-folders, one of which is a tax folder.

Estimated and other taxes.  If you have to pay estimated taxes or other liabilities that occur each year, a tax calendar is very helpful.  It can be a paper chart or a spreadsheet or whatever works for you.  It should include things like

  • Who gets paid
  • When it is due
  • How much you must pay
  • When you paid it
  • How you paid it

A quick glance will tell you what is coming up soon and what you have taken care of already.  And, of course, the payment & receipt copies go in the tax file.

Medical Expenses.  These occur throughout the year but if the expense is being captured by your medical insurance companies, all you need for your accountant is a year-end report from your online account(s).  Out-of-pocket expenses that insurance does not cover are what you need to save receipts for.  Store the receipts in your tax file.

Donations.  If you donate to a legitimate charity, keep your receipts.  Note the date given, how you paid them, and how much the donation was worth.  Cash is easy.  For donated goods, keep a list of items, what condition they were in, and the “garage sale” or fair market value.  Agencies like the Salvation Army and GoodWill publish values for many items.  I have spreadsheet that I update & print each time I donate clothing and household goods.  This is also helpful if you are cleaning out an estate.  It all goes in the tax file.

Tracking your expenses in personal finance software helps you know exactly what you have spent and lets you generate summary reports for the nitty-gritty items.

Tax Documents.  1099’s and K-1’s and other tax forms begin to show up at the beginning of the year.  Most people realize that they are important and do put them in a stack or a file.  We keep a checklist for each client of what documents were received last year so we know what might be missing.  Change your list as your investments or sources of income change.

Selling Your Home.  Selling a home is another big tax trigger.  You can write off some of the expenses.  Keep records of the things you do to the house for six months prior to settlement as they may be considered selling expenses.  Your settlement sheet also has the fees and points listed, so hang on to that…in your tax file!

Stay on Top

As things happen throughout the year, just put them in your tax file.  Scan them first if you are able because most CPA’s have electronic portals for uploading tax documents.  If your stuff is already scanned, you have less stress at tax time. 

At the end of the year, either organize the papers by Income, Taxes, Medical, Donations, etc. or scan anything you have in paper form only.  Having everything in one place makes it easier to fill out the tax questionnaire your accountant may send.  If you prefer paper-only, then a visit to your CPA is needed.  Otherwise, upload it to their tax portal and keep track of what you have sent.  Aside from K-1’s and a few other stragglers, you should try to finish before March 1st

Too Hard Still?

If this all sounds too difficult for you, then a Daily Money Manager might be the solution to your struggles.  DMM’s classify transactions, produce reports, organize tax paperwork, and get things ready for your CPA.  Once the return is complete, they help you stay on top of payments & filings.  People struggle with these tasks for a variety of reasons, so don’t let embarrassment stop you from getting the help you need.  It just isn’t easy for everyone.

Having your taxes organized, or at least keeping things all in one place throughout the year, can save you hours and aggravation in the spring when most of us would rather be…doing anything else!


Your health and peace of mind are worth every step of this journey.