A Low-tech Approach to Organizing Your Tax Documents
When it comes to getting organized to file your taxes, a low-tech approach may be the best.
A couple of lowly manila folders are all you need to collect the forms and documents you accumulate over the year. Labeled simply “Income” and “Deductions,” they’ll provide handy holders for necessary receipts, documents, forms, etc.
What should go in the folders?
- Records of your income from earnings and investments, including W-2 forms (wages) and 1099 forms (interest and dividends)
- Year-end bank and brokerage statements, mutual fund reports and other documents related to earnings from savings and investments
- Records of stock sales, including 1099-B forms. Plus, paperwork showing when and for how much you bought the securities in order to calculate your taxable gain or loss
- Form 1098, which shows what is likely your biggest deduction -- the mortgage interest on your home
- Receipts for child care expenses (some may be deductible)
- Records of charitable contributions
- Statements related to personal property taxes, real estate tax payments and state income tax you paid
- Records of unreimbursed business expenses, such as work-related tuition for classes, books, uniforms, professional journals, etc.
- If you're self-employed, receipts for supplies and computer equipment (If you work out of your home, you also may be able to deduct a percentage of your mortgage payments and utilities.)
- Receipts for medical expenses, such as out-of-pocket hospital costs, lab work, dental and eye care, prescriptions and insurance premiums (They must exceed 7.5% of your adjusted gross income to be deducted.)
Neither Nationwide nor any of its representatives give tax or legal advice. Federal tax laws are complex and subject to change. Please consult your tax or legal adviser for answers to your specific questions.