Organizing your tax files doesn’t have to be a burden. In fact, setting up even the most perfunctory process for storing your documents throughout the year can save enormous time. That could be an a digital file, accordion folder, or a shoebox. The point is to prepare a functional system that is standardized and efficient. It’s these two qualities that will make storing your files a habit, and in turn, make it easy to find what you need when it comes time to file your return. To help you get started, here’s what an organized print and digital file system might look like.
Print Tax Files
Although many companies have gone paperless, saving physical receipts is still the easiest way to accurately track your expenses. Keep a folder in your car to collect loose receipts and other paperwork. At home, create a folder or binder with labeled sections to keep all of your paper documents organized by category.
Digital Tax Files
These days, it’s easy to pull out a smartphone and capture a high-quality scan of a doctor’s bill or gas receipt. Consider organizing your tax documents digitally: Scan and upload receipts to designated folders within the larger “Taxes” folder to stay organized. Consider creating a spreadsheet to track expenses in each category, but be sure to save images of physical receipts and invoices.
Which tax documents should I save?
- Donations: Receipts from charitable organizations
- Child Care Expenses: Education, camp, day care
- Medical: Doctor’s bills, prescription receipts
- Home: Property tax bills, home loan interest statements
- Travel: Tax-deductible airfare, meals, and hotel expenses
- Office Supplies: Receipts for your eligible home office deductions
- Auto: Gas and mileage trackers for deductible travel
- Professional Fees: Advertising, attorney fees, business cards, graphic design
- Utilities: Paid bills for deductible home utilities such as electricity and internet
- Tax Documents: Forms including your W-2, 1099, and 1098
- Miscellaneous: A catch-all for other assorted tax documents
A version of this article appeared in our partner magazine, The Essential Tax Guide: 2023 Edition.