11 Feb 2018 | Written by Daniel Dewitt
In today’s world of booming technology, we have access to all kinds of tools that can help make our lives easier. It’s possible to organize our bills, keep track of our spending and digitally archive important records and receipts we may need later with the tap of a button. And on a day like April 17th, the deadline for filing our taxes this year, we can certainly put this amazing technology to good use. Easy-to-use apps like Paper Trail and Shoe Boxed make it easier than ever to store and save all your important financial records in one place using your smartphone.
Using apps like these throughout the year makes for a much easier and stress-free Tax Day. But if you’re like many of us, you may not know about these apps and all your receipts are scattered about in drawers, cabinets, pants pockets and the glove box of your car. Now, if you regularly use signature loans to handle unexpected financial emergencies, you probably want to get the most out of your tax return this year. Not to worry, because here’s some smart and simple tips to help you get organized for Tax Day.
To start, you’ll want to gather up all the documents you can find and begin organizing them. Everything from last years’ tax forms, business related expenses and paycheck stubs should be included. Don’t worry about any missing documents. A good way to start organizing for Tax Day is to grab what you can readily find and go from there.
Next, when sorting through your pile of paystubs, tax forms and receipts, you should ask yourself, “Do I still need to hold on to this?” If you have an insurance claim, assets sale or investment account that is leaving you a little confused as to what to keep and what to ditch, you may want to speak to a tax professional or accountant. If nothing else, always make sure to hold on to your IRS documents. The IRS’s statute of limitations for audits typically has a 3-year limit, so after that, you’re safe to safely dispose of these records.
The experts recommend that you sort your financial records according to how soon you’ll need them. Whatever is most recent, you should file front and center, then work your back from there. Also, it’s always a good idea to digitally scan your documents to a hard drive in case of a flood or a fire. After you’ve filed your taxes, you can safely discard the following financial records: paystubs, bank statements, investment statements, loan statements and receipts. Anything you no longer need but may need in case of an audit should be archived for the standard 3-year period.
Be sure to categorize the files you’re keeping so you have easier access to them when the time comes to file your taxes. Now that you have everything cleaned up and organized, go ahead and shred whatever unnecessary paperwork is left over. The less clutter you have now, the easier it will be to prepare for future tax filings.
If you want to avoid the need for installment loans this year, maximizing your tax return could be a big step towards avoiding those unwelcome financial emergencies. To get the most out of your tax return, the first step is to make sure you are organized and have everything you need to file. Take the time now to rummage through whatever financial records you have and get them ready for sorting. It may seem like a daunting task now, but it sure beats scrambling around at the last minute on Tax Day.