Even though we bid adieu to the previous year on January 1, we can’t quite say goodbye until the year’s taxes are filed. The first joint filing of taxes for newly married couples can be advantageous because the Internal Revenue Service (IRS) allows you to deduct two exemption amounts from your income and qualify for multiple credits. But two incomes and double the expenses to keep track of can make tax time more difficult if you’re not organized from the start. Here are six tactics to help you get organized to handle this year’s taxes and beyond.
1. Use a cloud-based spreadsheet
A shared cloud-based spreadsheet can help you and your spouse keep track of expenses, tax-deductible donations to charity, and health care spending, especially if you have a Federal Flexible Spending Account Program (FSAFEDS). Using a cloud-based system with a companion app for your smartphone allows you and your spouse to collaborate by making entries as the year progresses. This is a huge time saver as the April 15 deadline approaches.
2. Snap photos of receipts with your smartphone camera
If you tend to lose receipts, snap a photo; the IRS accepts digital copies. If you have a mobile printer, send the photo of your receipt to it while you’re out and file the printout immediately upon returning home.
3. Find a personal finance app
If your goal is to live a more paperless life, there are many personal finance apps that eliminate the shoebox full of receipts. Simply snap a photo or scan your receipt, then import relevant information to digitize it. Getting into the habit of using the app regularly is efficient and results in a nice neat report with your year’s expenses categorized for easier filing at tax time.
4. Ask an accountant
If you’re not sure of the most recent tax rules and regulations, it’s a wise investment to consult an accountant who can maximize categorizing your spending into legal deductions and help file your taxes.
5. Safeguard your tax returns
The IRS recommends that you keep your tax records for three years from the date when you originally filed your return or two years from the date you paid your taxes. In case you’re ever audited, the IRS may ask for documentation such as receipts detailing expenses, charitable donations, and medical costs. Keep receipts and paper files in a safe or storage box that can protect paperwork from fire, water, and long-term damage from heat and humidity.
6. Shred paperwork after three years
After three years, securely dispose of any paperwork documenting your taxes. This helps ensure that your personal information won’t fall into the wrong hands and reduces the risk of identity theft.
These six suggestions are simple ways to help you get organized, but don’t feel like you have to do everything at once! Pick one thing from the list and start there. After all, simple changes can help streamline tax preparation this year and beyond.