Top 10 Tips for Organizing Your Tax Information


When it comes to getting ready for tax season, organization is more than half the battle. By taking a few easy steps in now, you can make your life much simpler come April.

1) Put tax documents in a folder

Get a folder and write “Taxes – 2014” on it. Whenever an important tax document (e.g., 1099, 1098, W-2, giving statement from a charity) shows up in the mail, put it in this folder. This way, when it is time to compile your tax return, all the necessary documents will be in one place. I recommend putting the folder in a convenient spot, preferably close to wherever you keep your mail. Don’t leave these documents sitting around on the kitchen counter or computer desk where they can accidently get mixed in with other papers.

2) Check the odometer

In case you didn’t write down your mileage on December 31 (like I recommended in our article on the business use of automobiles), write down your current mileage and date. This will allow us to estimate what the mileage was at year-end. An even better solution is to have the odometer documented by an oil-change or repair shop. This third-party documentation will be very helpful in case of an audit. If you have been keeping an actual mileage log throughout the year, add it up and put it in your taxes folder.

3) Track your donations

For donations of less than $250, you may not receive an acknowledgement form from the charitable organization. If this is the case, look through your records and compile a list of your donations. Don’t forget to include non-cash donations to organizations such as Goodwill and The Salvation Army. If you made a charitable donation through your employer, provide us the final pay stub of 2014 as evidence of the amount; this information is usually not on the W-2.

4) Use the tax organizer

Eilts & Associates clients should have received a tax organizer from us in the mail during the past few weeks. In addition to listing the documents needed for your tax return, the tax organizer also includes a list of questions that will help us identify all the tax deductions you are eligible for. Please let us know if you need another copy of the organizer.

5) Remember property taxes

If you are a homeowner and your property taxes are not paid from an escrow account, find your total property taxes for the year by adding the amounts from both installments. Remember that you need to provide us with your house’s PIN to take advantage of the Illinois property tax credit.

6) Cash in on new kids

If you welcomed a new child to the family in 2014, first of all—congratulations! Secondly, remember that the new child arrived with some built-in tax benefits. Provide us the child’s full name, Social Security Number, and date of birth, so you can take advantage of these tax benefits.

7) Track gains and losses

If you sold stocks, bonds, or other investments during 2014, the broker or investment company will provide documentation with the sale proceeds. But these documents might not include the cost basis. If this is the case, look through your records to find the amount you paid for the investment, so we can determine the gain or loss.

8) Book those education expenses

There are several potentially valuable tax breaks for college tuition and other postsecondary education expenses. Students or their parents may be able to claim one of two federal income tax credits or a deduction. There also is an Illinois state income tax credit of up to $500 for expenses relating to kindergarten through 12th grade. For more information, check out our article on education tax breaks.

9) Prepare for the use tax

The State of Illinois moved the reporting of the use tax to the IL-1040 in an effort to increase reporting of this little-known tax. Let us know if you plan to calculate the actual amount for this tax, use an estimate, or report $0 use-tax liability. If you plan on using the actual amount, provide us a list of purchases you made in 2014 that were not subject to state sales tax. For more information about the use tax, see our article on the use-tax reporting requirements.

10) Put tax documents in a folder

I know this tip was already on this list, but it’s so important that it deserves to be on the list twice. (Plus, a Top 10 list sounds a lot better than a Top 9 list.)

I hope this helps you get organized for tax season. If you have any questions, please contact Bart Eilts at 773.525.6171 or bart@eiltscpa.com.

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