How to Prepare for Tax Time

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Tax time can sneak up on you. How do you make sure that when spring rolls around, your finances are in the best shape they can be and your tax preparation can go quickly and easily?

There are many things you can do to prepare for tax season.

Start at the beginning of the year and make sure you’re putting all your tax documentation in the same place, so at the end of the year, you don’t have to hunt down each piece of information separately. This leads to incomplete information and incorrect tax returns.

What do you need? Make sure you have all your W-2s, of course, but if you are a homeowner, you can deduct the interest you paid on your mortgage, so be aware of how much interest you paid. The same is true for student loan payments.

You also need a record of any money you spent on childcare during the year, as well, as the social security numbers of your children.

If you have donated anything to charity, you’ll need records of what the value of your donations were and where you donated them.

If you earn any income from interest, you’ll need those statements as well.

The best preparation for tax time is a well organized set of financial documents from the prior year.