Getting Ready to File your Taxes

Well, it’s that time of year again. Holiday Season is over — Tax Season is here. Whether you engage a professional or prepare your own taxes, it’s time to start pulling together your 2015 your income and deductions.

When your records are disorganized, pulling together your tax information takes hours away from enjoying your life. Not to mention the stress it adds! Did you promise yourself last tax season to get better organized? Well, if you didn’t keep that promise before, you can keep it now by following these tips:

What to Keep

As you gather information for 2015, collect those same items regularly throughout 2016. Depending on your situation, these items include:

  • Recent year-to-date paystubs with your income and withholding information, mortgage and equity line-of-credit statements, real estate and other tax payments, unreimbursed medical expenses, and after-tax medical premiums.
  • Donations to a qualified charity made by cash, check, or payroll deduction must be acknowledged in writing. Donations of $250 or more require a detailed letter from the charity.
  • Donated clothing and household items that are in good usable condition can be deducted based on the “thrift shop” value. Donated vehicles and other items valued over $5,000 require more documentation.
  • Investment statements of your interest, dividend, and capital gains or losses year-to-date for tracking taxable income and managing capital gains and losses.

Anything new in your life for 2016? Keep these things in mind:

  • Buying or refinancing a home?

Keep your settlement statement (i.e., HUD-1) to have a record of any deductible items paid when you close on a new mortgage.

  • Household member starting college?

Keep receipts and other documents for qualified tuition and other expenses for post-secondary education. You could get a tax credit of up to $2,500, depending on your circumstances.

Keeping Your Records

Keep it simple. The goal is to substantiate the income and deductions on your income tax return.

  • Keep everything in one place and keep it up-to-date.
  • Electronic or paper records are a personal preference, as long items are substantiated.
  • Options are saving paper income statements and donation acknowledgements in a secure, fire-resistant location or scanning them to a secure electronic file.
  • Business owners and other taxpayers with more complex tax situations should consider keeping automated records, either in a spreadsheet or accounting software.

Get Reliable Help

Sure, you can probably do all this yourself. But a qualified, reliable tax professional can save you time and aggravation. Ask people you know for referrals. The IRS has a website to help at No matter what, interview at least two and make sure you feel comfortable. It’s an important relationship.