How Do You Prepare for Tax Time?
The Bank Note’s savvy readers came through again with smart ways
to prepare for tax time. Thanks to everyone who emailed us. Our
selected readers each received a $25 Nationwide Bank
Visa® gift card* for these helpful tips.
Find next issue’s question at
the bottom of this page.
I prepare for tax time by pulling out my previous tax returns. This jogs
my memory about what paperwork I need to collect. Then I organize my
receipts by category and create an envelope for each: charity, medical
expenses and so on. This makes it a little less painful when it's time to
do my taxes.
-Keith F.
My husband and I prepare for tax time by considering whether we
have any changes in the new tax year from the prior tax year. This
includes changes in our earnings, or deductions, as well as changes to
the tax code, made by Congress at year end. [Then,] I usually take last
year's forms and plug in a few new numbers to reflect the changes and use
the IRS web site to find tax tables from last year to get an idea of what
our taxes will be this coming year so there are no surprises.
-Joy G.
At the beginning of each year, in January, place a large 'Tax folder' on
your desk or other convenient spot. All year long, place any 'tax'
related receipt or item (charitable donation, sale of stock, dividend
statements, etc.) in the envelope. Jot down helpful tax notes on the
front of the folder to jog your memory at tax time. As you receive your
year-end tax statements (W-2's, 1099's, etc.), immediately place them in
your tax folder. In February, when you are ready to prepare your
taxes, you will be surprised when seeing all the receipts in your folder,
and notes you jotted down on tax things that you had long forgotten
about, and otherwise would not have recalled. Everyone I recommend
this tax practice to finds it very useful.
-Irene B.
We keep a calendar to write down all our tax-related mileage. No
more guessing how many times we drove to school for the PTA or other
volunteer work. Several times throughout the year we take this
information and put it into a spreadsheet. It might not seem like
much, but those few miles a trip really do add up over the course of the
year.
-Lawanna C.
Tax time can be extremely stressful. I find that if I spend 30-60
minutes each month sorting through receipts, logging them in a
spreadsheet, and preparing a file I don't get so stressed when it is time
to turn those items in come the due date. My tax preparer also takes
less time preparing my taxes because of my organization. That saves
me on his hourly fees.
-Amber B.
We start every calendar year with a new check register in our
checkbook. Then every transaction that will be a tax deduction
(charitable gifts, real estate taxes, etc.) during that year comes out of
that account with a check. That forces us to have
good documentation for all of those expenditures from one
source. Also, a great place to start each tax season is by
downloading the current tax year Publication 17, Your Federal Income
Tax. It is a wonderful overview resource, especially the first
section, called "What's New?" to identify changes that may be of
benefit.
-Tom S.
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*All submissions received by January 31, 2013, will be considered for
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winning entrants by email. This email will request that you reply with
your current mailing address so we can properly mail you your $25
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