One of the hardest parts of doing taxes yourself is to organize your documents and information needed. From what forms you have to file to where we have placed the receipts, all becomes a mess when the tax day is approaching if we didn’t prepare. The more various your sources of income are, the more supporting documents you will have. Whether you hustle on a side, are self-employed or are an investor, you have a number of forms coming.
Recommendations to U.S. expats to get organized for 2018 tax season
Here is some guidance to help you confidently arrange all your documents fast and easy making the filing process less time-consuming regardless whether you prepare the tax return yourself or have a tax preparer does it for you. In both cases, it is important to include all information on the return.
1. Dedicate one place where you will keep all your tax documents. An income tax binder is a great solution to help you keep all your documents in one place! This will save you a lot of time gathering your documents.
2. Create divider tabs in your in binder making sections for specific categories:
- Investment Income
- Rental Income and Expenses
- Self – employment and Expenses
- Qualified Deductible Expenses
- Education Payments
- Other supporting statements
- Personal Information for everyone that goes on your tax return
3. Gather all your documents and place them in the appropriate divider for an easy access.
Don’t forget to track your expenses
Whether you have self-employment or rental income, you want to be very meticulous about keeping track of your expenses. These activities, in particular, incur a lot of expenses that you can, later on, offset against the income they produce, so making sure you gathered all of them is very important. They will lower your taxable income in the end. Keeping all your expenses in one place will also be beneficial in case of an audit, if the IRS asks for additional proof of your business expenditure. Overall, you want to keep these in one place that you can easily access.
Start a tax binder now and add the receipts as you receive them. You’ll thank yourself later.
Create a folder with last year taxes
It is always good to compare your tax returns especially if you’re preparing them yourself. You can easily track your certain items such as Foreign Tax Credit that has been carried forward and you might need to use it this year! Attach such a statement at the end of your return.
Being organized is just a half of the battle, but having all your tax information together to make the tax prep easier and less time-consuming. Creating such a system doesn’t take that long and will save you hours of searching for certain documents. Then, the next step of figuring out what forms these documents require will be much easier!
Do you need a help with U.S. tax returns? We can help you before this year’s deadline!