Best Practices to Organise Tax Documents and Receipts

photo of woman working on her annual tax return, with a slew of files and receipts on her desk

Ah, spring! The scent of budding leaves and blossoming flowers in the air, warmer temperatures, longer hours of sunshine and… tax returns.Β 

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It’s that time of year again: many locales around the world have springtime filing deadlines. Tax season is no fun… and unless you live in Monaco or the UAE, you just gotta do it.

Best Practices to Organise Tax Documents

photo of woman working on her annual tax return, with a slew of documents on her desk

Even if you’re using tax software or work with a certified accountant or tax preparer to file your return, you still need to put in some elbow grease, if only to get your bank statements in order and organise your tax receipts for them.

Procrastination can cost you late fees and interest, so it’s worth having a system in place. Ideally, one you use all throughout the year.

Good preparation is half the battle!

Whether you have one income stream or seven, are a student working part-time, a contractor or pensioner, a full-time employee with a side hustle, a SAHM or run your own business: if you organise tax documents throughout the year, you’ll find it makes it easier to file by the due date.

Filing by Category, Folders, Receipts

photo of woman hunched over her annual tax return files, with a slew of documents on her desk for tax season

My own system consists of three main building blocks that you might find easy to adapt to your tax situation:

  1. I do preliminary bookkeeping in Excel on a weekly basis. When we get ready to file before tax time hits, I pass the spreadsheet over to my accountant.
  2. On the computer, I maintain a tax folder for each year. Each folder has nested sub-folders for different income strea such as capital gains, full-time work, side-hustle etc. These sub-folders contain digital documents such as PDF invoices and electronic paystubs I’ve received throughout the year.
  3. I organise any paper receipts, documents, or other tax records that need to be kept in hard copy into a dedicated tax document binder. These are usually papers that must be kept on hand if an audit crops up, but sometimes at the end of the tax year, I’ll find things that can be scanned and stored digitally.

That’s pretty much it in terms of my tax prep checklist and how I organise tax documents. If you invest two minutes (GTD, anyone?) every time something lands on your desk (a bill, business expenses receipt, payslip, potential deduction, etc.), you’ll have way less of a mess to deal with when it’s time to prepare your taxes.

Unless, that is, you discover you’reΒ missing 1099sΒ for the IRS on tax day. πŸ˜…

Black businesswoman in a white blazer, wearing glasses, calculating financials to organise tax documents for her tax return filing preparations.

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