Get Organized For the Tax Year

As we begin a new year, it's a good idea to get organized for filing your taxes. Tax filing doesn't have to be an ordeal, and it can be less time-consuming and less frustrating if you have all the material at your fingertips.

By being prepared, you'll be ready to file your return at the earliest possible moment. The IRS usually starts accepting returns around mid-January. The earlier you file your return, the sooner you can expect a refund. Here are the most common documents you will need.

Identification numbers
The IRS tracks every taxpayer through an identification number, a.k.a. your Social Security number. If you have any children, parents, or other dependents that you are claiming on your taxes, you will need their Social Security numbers as well. If you are filing jointly with your spouse, you will need that number as well. Don't forget the tax identification number of the person or business that takes care of your kids during the day. You will need that if you file for a child care credit.

Income tax documents
By the end of January, you should receive a W-2 form from your company that shows how much you earned, how much is taxable and how much was withheld. If you have more than one job, you should receive more than one W-2. If you're an independent contractor, the company you worked for will send you a form showing you your gross earnings. If you're self-employed, you have a bit more to get organized. Track down all receipts and documentation for business-related expenses, from the mileage records you kept when using your car for business to the office equipment and supplies you bought to the utility bills you paid to keep the home-office lights on.

Other assets
If you are saving for your kid's college, a new house or retirement, good for you-but the interest on most savings accounts is taxable. Pull out your year-end financial statements to compare with tax documents.

Miscellaneous income
If you received a state income tax refund last year, pull out that form. If you own rental property, make sure you have documentation of all the costs for your taxes. Other miscellaneous things-some retirement payouts are taxable and even unemployment collections are taxable.

What's deductible?
Costs related to your home are a good place to start. The interest paid on your mortgage loan is tax-deductible, so your lender will send you a form showing how much interest you paid over a year. Don't forget the interest you may have paid on a home equity loan. Your year-end loan account statement will show you this amount, and in most cases, it's tax deductible too.

Work expenses can cut your taxes
If you looked for a new job, bought work-related items and weren't reimbursed, or moved for a new job, all of those expenses can be tax-deductible. You will need your receipts for all of these expenses in order to claim them, so make sure to be organized.

Good works - good tax break
Donations to charities can be deducted, so make sure you save every receipt or note from the charity showing your donation. You will also need the receipt if you donated any clothing or goods to a local Goodwill or other organization.

Having all the documentation ready will make your tax-filing process much easier. Getting everything prepared ahead of time means a quicker filing and quicker return!