The third week of January is the ideal time to begin preparing for tax season. A little organization now can make tax preparation far less stressful later. The tips below will help you gather what you need, stay organized, and approach tax time with confidence.
Personal Tax Returns
Collect documents as they arrive.
Some tax-related documents are issued at the time a payment is made rather than at year-end. For example, in my state, property tax bills are due in June and December, and the bill itself serves as the tax receipt—no additional documentation is sent. That makes it essential to file those receipts in a place where they can be easily found at tax time.
I place property tax receipts and one-time charitable donation receipts into a large manila envelope as they come in. If you haven’t already done this, take some time now to review your files and locate the documents you’ll need.
Review checkbook registers for deductible expenses.
When I begin preparing my tax information for my accountant, I review my checkbook register for:
- Charitable donations for which I may not have receipts
- Medical expenses that may be deductible
- Payments made to my tax preparer for the previous year
This step often uncovers deductions that might otherwise be missed.
Watch the mail.
Employers, banks, the Social Security Administration, financial institutions, state governments, and nonprofits are required to provide W-2s and 1099s by the end of January. Be on the lookout for envelopes labeled “Tax Documents.”
Designate one place for these forms to avoid misplacing them and wasting time later. I add them to my manila envelope with other tax-related paperwork, but a desk tray, basket, or designated folder works just as well.
Create a digital file for downloaded tax documents.
Some organizations send tax documents electronically rather than by mail. Download these forms and save them in a clearly labeled folder on your computer so everything is in one place.
Prepare a summary sheet for your tax preparer.
Your accountant does not need every individual receipt. Instead, summarize deductible expenses in categories. For medical expenses, total costs by category such as doctor visits, dental care, prescriptions, and vision expenses.
For charitable contributions, list each organization, the total amount donated, and the organization’s mailing address. I also like to summarize W-2 and 1099 income on a single sheet, even though I provide the official documents as well.
Small Business Owners
Prepare and send required tax documents.
If you paid employees or contractors in 2025, now is the time to prepare required forms. W-2s must be delivered to employees by the end of January, and 1099s must be sent to independent contractors paid $600 or more.
If you use a payroll service, they will typically prepare and distribute W-2s either by mail or through a secure online portal.
Watch the mail for incoming business tax forms.
You should expect to receive 1099s from companies your business worked for, as well as forms related to interest, dividends, online sales platforms, and business loan or mortgage interest.
Organize deductible business expenses.
If you use accounting software, organizing deductible expenses should be straightforward, as most business expenses are deductible. When I owned my restaurant, I printed a summary expense report for my accountant—he did not need to review individual transactions.
Reasons to Prepare Early
Most people don’t enjoy tax preparation, but completing these tasks early in the year offers clear advantages.
Reduced stress.
Gathering documents as they arrive and storing them in one secure location prevents last-minute scrambling and reduces anxiety. Everything is ready when it’s time to file or meet with your accountant.
Faster refunds—or more time to plan payments.
Filing early means refunds arrive sooner. If you owe taxes, early preparation gives you time to plan, save, or make payment arrangements.
Fewer errors.
Providing documents to your accountant early allows them to work on your return before peak season. With fewer time pressures, your accountant can review details carefully and confirm information with you.
Opportunities for last-minute tax strategies.
Early in the season, accountants have time to recommend strategies that may reduce your tax burden or increase your refund, such as retirement contributions. You can also adjust your tax planning strategies for the year ahead.
Taking time to prepare for taxes in January saves stress and time as the year becomes busier. Do yourself a favor and begin organizing as soon as your first tax document arrives—whether by mail or email. A little effort now can make tax season far more manageable.
Susan's Reflections 