Tax season can feel like a recurring nightmare for many. The nightmare is from gathering mountains of financial paperwork, the anxiety of organizing it, and the fear of missing a critical document. But it doesn’t have to be this way.  

With some simple systems in place, you can transform tax time from a season of stress into a relatively painless annual ritual. A little prep now equals total peace of mind later. Isn’t that worth it? 

But what is the secret to this painless annual ritual? The secret is putting a document management strategy in place well before the looming tax deadlines. You’ll minimize the last-minute scramble by using the right folders and categorizing techniques from the start.  

With the proper preparation, tax season can become an organized affair. Here are some of the tips for organizing your tax documents in folders. 

Use Durable Tax Folders for Accountants 

The first step is getting your hands on some sturdy folders explicitly made to hold all those tax documents. Look for expandable ones constructed from long-lasting materials like acid-free paperboard. These will keep everything neatly packed away for years without the contents getting crammed or crinkled.  

Accountants know how important it is to protect tax papers safely for the long haul. That’s why you’ll need durable tax folders for accountants, tough enough for the task. A good option will also have inner pockets and slots to store business cards, so you can find things quickly when tax time rolls around again. Only the most durable folders will keep you organized season after season. 

Furthermore, tax folders made of flimsier paper tend to wear out quickly with handling. The corners might break, or the folders could rip after one tax season.  

On the other hand, durable folders maintain their shape even after housing documents for several years. Opt for brightly colored folders for easy identification. Tabbed folders with clearly labeled year tabs make documents easier to retrieve at a glance. 

Whether you need individual folders for each tax year or common folders for types of documents, durable options will serve you well for many future filings. Sturdier tax folders are a higher initial investment than cheaper paper varieties. However, they prove economical in the long run by keeping your records intact for many years of use. 

Organize Your Folders by Tax Year 

One of the simplest yet most effective ways to arrange your tax documents is by the year they pertain to. Set up a separate folder for each tax year and label it clearly with the year.  

For example, you could have folders marked “2019 Tax Records”, “2020 Tax Records” and so on. Organizing this way segregates documents neatly according to the year of filing. 

It allows you to file away documents for a particular year together once you have submitted your return. Then, the folder is readily available for references if needed in the future come tax season. When sorting new documents received for a year, it is easy to file them under the corresponding folder with this system.  

Your tax preparer or accountant can also quickly locate documents from specific years when working on your returns or answering queries. Folders compartmentalized by year keep your documentation tidy and accessible. 

Create Subfolders for Different Types of Documents 

Along with primary folders separated by tax year, you may find adding further organization using sub-folders helpful. Separating tax return documents by type offers another arrangement layer within each annual folder. Some typical categories you could use subfolders for include: 

  • Wage and Income: W-2, 1099, and other income statements. 
  • Deductions: To file away receipts and documents related to deductions like charitable contributions, mortgage interest, etc.   
  • Capital Gains: For statements about investments and asset sales. 
  • Business/Rental: Specific to documentation from self-employment or secondary income sources. 

Custom subfolders make it effortless to file away and find documents as you receive them. Your account can also quickly obtain papers needed for certain return sections. The sub-categorization keeps related records clustered together for maximum convenience. 

Use Manilla Folders for Bulky Items 

Some tax documentation, like property tax records or investment portfolios, may need to be more voluminous for standard filing. Bulky papers can cause folders to bulge awkwardly and may get damaged if forced inside.  

A better way to store such hefty statements is in manila folders. These sturdy folders maintain their shape while housing oversized documents safely. 

Those manila folders around the office can also be helpful for tax time. Label them with the year and title, like “2019 Property Tax Records”. Or file them under the right section: “Deductions – 2019 Property Taxes.” This protects any bulky or essential papers from getting damaged when stuffing them in folders.  

No more folding or creasing valuable documents! The folders also make finding what you need easier since you won’t have to dig through stuffed pockets. Just pull out the labeled envelope instead.  

Furthermore, they’re super affordable and will hold up over the years. Manila folders give your tax papers a safe and easy way to stay organized for the long haul.  

Save Electronic Copies in the Cloud 

Consider backing up select documents digitally along with your physical paper filing system. Vital records like tax returns, financial statements, or investment records can be saved as PDFs or photos in the Cloud.  

This serves as a second layer of protection against disaster or document loss. Digital copies ensure your data is preserved if your paper folders are damaged. 

Storing electronic files also makes certain documents portable and accessible from any device. You could share selective PDFs with your accountant or tax preparer over email for preparation assistance. Specific investment or income records are within easy reach on your computer or phone for reference during filing.  

Digital archives of critical documentation keep your data secured in the Cloud for convenience and physical records at home. 

Conclusion 

Tax season doesn’t have to mean messy papers everywhere and scrambling to find your documents at the last minute. Implement some of these easy organizational tips and make tax time a breeze. Picture it: all your important documents are safely stored in sturdy folders organized by year, then broken down further into clear categories.  

Posted by Raul Harman

Editor in chief at Technivorz and business consultant. I like sharing everything that deals with #productivity #startups #business #tech #seo and #marketing