How To Organize Your Tax Information

It’s February, and all of your W-2’s, 1099s, and other tax documents should have arrived in the mail. Now it’s time for you to get your tax information ready for your accountant. Be kind to your accountant, and do not give him or her an unorganized mess. 

Pile of unorganized receipts and tax documents

Take the time to go through the documents in the large manila envelope (or box or drawer) you stored them in.  If you are not itemizing deductions, your accountant only needs documents related to income you received and adjustments to income. Documents used to report income include W-2, 1099, 1099-R, 1099-INT, 1099-NEC, and 1099-MISC.  You may have also received a 1098-T for student loan interest, which is an adjustment to income.

If you are not itemizing, these are likely the only documents your accountant needs.  Put your documents in order as they appear on form 1040 and paperclip together.  I recommend that you provide a summary list of all income and adjustments to income.  If you itemize, you should also include your deductible expenses on the list.  Do not give your accountant receipts for deductions; he only needs to know the categories and amounts.

Your deductible expenses might include:

  • Health related expenses that exceed 7.5% of your adjusted gross income (AGI).  For example, if you AGI is $65,000 and you have medical expenses of $9.400, you can deduct $4,525 of medical expenses ($94,00 – ($65,000*.075)).
  • Property taxes
  • State income taxes paid
  • Fees paid to have your taxes prepared by a tax professional
  • Moving expenses, if you moved 50 or more miles for a job
  • Charitable donations—you need a receipt to claim deductions of more than $250 to a single charity.  Separate cash and non-cash donations. You may also deduct mileage on your personal vehicle while performing volunteer services.  Your accountant only needs to know the mileage associated with service for each charity.

My tax summary form looks like this:

These steps will make preparing your tax return easier for your accountant, which may translate into a lower tax preparation fee.

To learn more money management tips and how to honor God with your money, please click the Finances categories tab to find many blogs on money management, budgeting, and stewardship. My book Honoring God with Your Money is a great tool for financial money management.

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