This is part two of 10 Steps To Organize Your Taxes. Click here to read part one!
In our last blog, \”10 Steps To Organize Your Taxes (Steps 1-5)\” we looked over the first five steps to help you organize your taxes. Let’s continue now by covering the last five steps.
- Investments: The sixth step is determining if you purchased or sold a business, rental property, primary residence and received a 1098 for the interest paid portion and if you received any assistance on your mortgage payments reflected on a 1098-MA. You\’ll want to make sure to notate and request the documentation or store the documentation you received.
- Retirement/Compensation: The next step to organizing your taxes is ensuring you make a note of all the components you contribute to, such as a sponsored plan, IRA, annuity, or deferred compensation plan, and making sure that you have the proper documentation for them.
- Loans: The eighth step comes down to determining your home equity line of credit (HELOC) or home equity loan and making a note of that.
- Income: The ninth step is income. You will want to ensure you received a W-2 statement or a 1099 statement for being a contractor or worker in another state or country outside of your residence.
- Plan to Spend: The final step is to make sure you are using a type of software to track what\’s coming in and going out, as this will significantly streamline the process of locating expenses by month.
Once you gather and organize this information, all you will need is to look at your spreadsheet that notates what changes occurred in each area, have the receipts and statements in the same file, and compare those to your Plan to Spend.
Call To Action
Now that we have gone through the ten steps to organize your taxes, go through these components and ensure that you have a solid plan to store documents and receipts and track any thoughts regarding your varying changes throughout the year.
Figuring out a system you can use for this will be pivotal because taxes aren\’t going anywhere. If anything, they will increase in years to come. You\’ll want to be more and more prepared to make sure that you\’re not paying more taxes than are owed.
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