Filing
Taxes Made Easy
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| Public Domain |
Every
January, when all the excitement of the Holiday season has come to a close, I
would make a mental list of what I need to accomplish for the upcoming year. Unfortunately, on every year’s list is the
dreaded task of filing my tax return.
Although April 15th is still four months away, I’d grimace
knowing that it will creep up on me, faster than I would have liked. For years, because of procrastination, I’d go into panic
mode the week taxes are due; I’ve waited, yet once again, to do
something that should’ve been done months ago.
Over the
years, my tax returns got more complicated, as there were more items that I
needed to report. Waiting till the last
minute is not an option anymore. Many
people I know opt to file for extensions every year. The ripple effect of postponing the
inevitable has to be a detriment to the mind and body. Is there a better way? Yes, we can be more organized!
Because the
whole tax process has become increasingly painful, I’ve developed a
few systematic techniques to make it quite bearable. It has helped me to be more organized; I’m hoping it can
help you, too.
At the
beginning of the year, I’d create an Excel spreadsheet which would contain all the
information that is needed to file my tax return. I would have a column for salary, amount of
taxes paid (income and real estate), retirement contribution, health savings
account (HSA) contribution, charitable contributions, bank account interests,
investment dividends, medical expenses, work expenses, and school
expenses. I’d fill in the
information as I received it throughout the year. I would also make individual labeled folders
for all the above mentioned categories, in order to keep the receipts, bank
statements, and salary stubs organized; this way, I could pull up the
information quickly if needed. The
spreadsheet is extremely useful at the end of the year because, I can check for
any discrepancies by looking at the numbers on the
spreadsheet and comparing them to the numbers on the tax documents that would
come in the mail every January. Once I’m assured that
all the information is correct, I would give it to my accountant for use in
filing my taxes.
By taking
about ten minutes a month to file and work on the spreadsheet, I would save
tons of time and stress later.
Presently, my tax returns are completed and mailed by the end of
February. I can breathe much easier
knowing that I have a system in place which helps me to be diligent. It’s still so easy to procrastinate, as
there are many other activities that I would prefer to partake in, but I keep
reminding myself that if I can avoid doing it at the last minute, it is better
for my soul. I still have friends who
choose to procrastinate on their taxes.
It would be on their mind all year long, and sometimes that’s all they
could talk about; in addition to that, they are grumpy, to say the least, when
the deadline is about to approached. My
advice to them is this; implement a plan, any plan; or better yet, use mine to
help you be more organized.
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