The Official PT Money Tax Preparation Checklist (Free Download)

Tax Preparation Checklist

Taxes. No one looks forward to doing their taxes but you can make it less stressful by being prepared with a tax prep checklist.

Here’s a quick list of things you may need to file your tax return.

This list will work whether you’re using a CPA or other tax professional, or whether you are doing it yourself through a service like TurboTax, H&R Block At Home, or QuickTax (for Canadians).

What Information You Need to File Your Taxes

While it might seem like the IRS wants everything from your blood type to your first-born, there are generally only four types of information you’ll need to gather to do your taxes:

Personal and Dependent Information

This is stuff like your family and dependents’ Social Security number or tax ID numbers. You’ll also want to have your bank account and routing number to be able to have your refund direct deposited.

Income

If you and your spouse work a traditional job and receive a W-2 each year, this is pretty simple. But it can get much more complicated if you earn freelance income, rental income, retirement income, investment or dividend income, or if you received unemployment compensation in 2018.

Deductions

Here’s where things can get really complex, especially if you’re the proud owner of a shoebox full of unsorted receipts. Even if you take the standard deduction and don’t itemize, there are still some things that can affect your tax burden that you’ll need documentation for.

A short list of that information includes:

  1. IRA contribution information
  2. Education information (tuition paid, student loan interest paid, etc)
  3. Home mortgage interest paid
  4. Medical expenses
  5. Job search and moving related expenses
  6. Charitable donations

Related: Commonly Overlooked Tax Deductions

Taxes Paid

If you pay quarterly estimated taxes, you’ll need to provide documentation of your payments. Also, if you owe state and/or local income tax (other than what is withheld from your paycheck), or you have paid vehicle sales taxes, you might need to have that information available for your filing.

Tax Preparation Checklist

Of course, just knowing that you need these things doesn’t make it any easier to get them gathered and organized. That’s why I’ve created the PTMoney Tax Prep Checklist (download). This is by no means a comprehensive list, although I tried to cover the items that the majority of taxpayers might need. But be sure to check with your tax professional or use your software as a guide to ensure you’ve got everything covered.

Getting (and Staying) Organized

The pain of tax season is only partially about seeing just how much of your money took a trip to D.C. It’s mostly about the frustration of finding and organizing a metric ton of boring paperwork.

One of the benefits of using an online tax service (see our TurboTax review) is that you can save your progress and come back to the return at a later time. So, having your items in order before you begin isn’t as important as say going into a CPAs office expecting to have your return prepared.

In addition, online tax services tend to remember your details from one year to the next. That can save you valuable time because you do not have to research the same questions year after year.

If you don’t have everything ready for your CPA, you’re going to have to go home and get that info, wasting gas money and time on a return trip. Avoid that situation by having everything ready the first time using this checklist. Most CPAs will provide you with an organizer packet as well. So be sure to request that if you didn’t receive it in the mail.

But whether you do your own taxes, use tax software, or have your CPA on speed dial, you can still save yourself a great deal of paperwork heartburn by committing to a system for your tax information. (And no, throwing it all in a shoe box doesn’t count as a system).

Thankfully, getting your tax information in order does not need to be a herculean task. In fact, you probably only need three folders to keep things in order throughout the year:

Folder 1: Income

This is the place where you’ll stash pay stubs, investment and dividend income information, and any other income information (such as unemployment compensation, gambling winnings, or other miscellaneous income).

In addition to keeping all of this paperwork in the folder, Dayana Yochim of The Motley Fool also recommends recording your earned income on a cover sheet in the folder, as well. Having that cover sheet will make it easier to check the accuracy of official documents (such as your W-2 or 1099 forms) once they arrive.

Folder 2: Expenses and Deductions

This folder might need to have several subsections, or else it could end up looking like the overstuffed shoebox of random paper. Rather than simply throwing all of your receipts, statements, and paid bills into this folder to sort through come tax time, separate this folder into different sections so you can be more organized throughout the year.

Create files within this folder to represent each category of expense or deduction that you need to track for taxes. You might include sections for business expenses, charitable donations, childcare, home ownership, education expenses, and medical expenses.

Taking the time to put your receipts and paperwork in the appropriate file within this folder will not only ensure that you have all the paperwork you need come tax time, but it can also help you avoid the inevitable confusion of trying to remember why you saved a particular receipt months after the purchase.

Folder 3: Investments

This folder will hold your annual statements from your investments, distribution records, notices of dividends and capital gains and losses, and records proving tax-deductible contributions to retirement accounts. Though you may not need this information for each year’s tax filing, it will make your life much easier to have it on hand when you do need it.

For instance, when you sell an investment, the IRS is going to want you to provide paperwork about the investment you sold. Having it already filed in folders based upon tax years will make providing that paperwork a snap, rather than an exercise in frustration.

The Bottom Line

Once you get in the habit of immediately putting necessary paperwork in one of these three folders throughout the year, you’ll find that sitting down to do your taxes–either on your own, with the help of an online tax prep service, or in a CPA’s office–is almost a pleasant experience. With organized paperwork, you can go down the Tax Prep checklist quickly and efficiently and move on to the next thing.

Because ultimately, who wants to spend more time than they have to on filing their taxes?

What about you? Do you do your own taxes? Do you use software, a service, or a CPA? If so, how do you ensure they have everything covered?

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About Philip Taylor, CPA

Philip Taylor, aka "PT", is a CPA, blogger, podcaster, husband, and father of three. PT is also the founder and CEO of the personal finance industry conference and trade show, FinCon. He created this website back in 2007 to share his advice on money, hold himself accountable (while paying off over $75k in debt), and to meet others passionate about moving toward financial independence. He uses Personal Capital to track his wealth. All the content on this blog is original and created or edited by PT.

Comments

  1. Michael Gellings says

    @Amy Spairana How much does H&R block charge for a home business?

  2. Amy Spairana says

    I use H&R block online. So easy and the check lists they ask you in the beginning help to ensure all your bases are covered, even for a small home business owner like me.

  3. Lauren Deckert says

    Do my own!

  4. Thanks, this is a useful resource.

    It’s funny how perceptions can lead to tax-time-torture. My wife and I file jointly. We both sit in front of the computer and prepare our return together. It’s my job to collate all the infrmation, so that when we are putting it together, it’s all at our finger tips.

    My understanding of having the information, is being able to find it in under a minute. Like fnding the site, or the statement. Her understanding is that all the information is sitting in a neat binder directly in front of us. She thinks we are totally disorganised, I think we are totally on top of it.

    I love taxes. Ha!

  5. Philip Taylor says

    @Hunter – Wow. That sounds like Mrs PT and I. Except she’s not even sitting there with me. 🙂

    I definitely use the find it when you need it method too. Still checklists are good for assurance that the software or CPA didn’t miss anything.

  6. Thanks for the check list! Great list to have.

  7. Philip Taylor says

    Thanks! Indeed it is. I still have to file myself.

  8. Jon | Free Money Wisdom says

    Sweet list Philip! Time to file baby…

  9. Mrs PT’s Tax Preparation Checklist:

    *CPA for a husband — check
    *CPA for a father-in-law — check
    *job that delivers payment in hugs and drool, but taxed in dirty diaper — check, check!!

  10. Jason @ One Money Design says

    PT, thanks for linking over! Good checklist to get ready for filing taxes.

  11. Cheapskate Sandy says

    I’ve been doing my taxes myself since I was 15, and I’m not than two that in age now, so no one gets my business but me. Thanks for the checklist! I wish my employer would send out the W-2 sooner than later because I am all ready to go!

  12. Thanks for the checklist, I’ve been starting to get receipts together. Gotta make sure my blogging expenses are covered!

  13. Pete – You’re doing it yourself? This will be the year I bring in a hired gun.

    MD – I’m loving that new gravatar. Loved your article on Untemplater this week.

  14. Thanks for link PT! A lot of great resources here.

  15. Thanks for the link – and for the tax prep checklist. Good to have as much organization help as I can get with my taxes this year!