Are you a new caregiver? Did you know that you can claim your parents as dependents when you file your taxes? Tax season is stressful enough without having to worry about how to file your taxes for your parents. Here at Senior Caring, we have all of the resources to help make this process easier for you, so sit back and relax with these tips to stay organized for tax season.
5 Tips to Stay Organized for Tax Season
1: Create a System
Filing your taxes can be a lot of work, especially when you have numerous amounts of paperwork that you need to keep for future references. Before you start your organization process, create a system of how you are planning to keep track of all of your information. Although there are a variety of apps and computer programs that can help keep all of your documents in one place, you can also opt for a simple binder or basic office supplies to keep your documents organized.
- Purchase accordion folders labeled with different categories of documents
- Download apps to store all of your documents (e.g. Dropbox)
- Use a binder sectioned off with different categories of documents
- Store documents in manila folders which can be stored in a drawer
- Color code your folders
- Use Microsoft Excel or any spreadsheet program to keep track of documents
2: Keep Receipts and Important Paperwork
Having records of important paperwork is important when it comes time to file your taxes. Among all of these tips to stay organized for tax season, this is the most important. When staying organized, make sure that you hold onto all of your receipts for gas mileage, home improvements/alterations, volunteering, as well as medical expenses as it pertains to your parents. You may know that you can file your parents as dependents, but keeping track of all of your expenses will serve as crucial documents for filing tax deductibles during the tax season.
Things to Keep:
- Receipts or paperwork on medical expenses for your parents (e.g. dental expenses or medical procedures)
- Gas mileages for travel expenses used for your parents
- Receipts for home improvements for your parents’ house
- Receipts or paperwork of long-term care if it applies
- Paperwork of records of gifts and estates
3: Stay Updated
An important tip to staying organized is to make sure that you are aware and up-to-date of important deadlines. Make sure that you are updated on the deadlines of when you should file specific forms. Aside from this, you should stay aware of any new changes to the filing process such as requirements for if a parent is eligible for deductions.
4: Organize Your Documents Often
Now that you have all of your documents, make sure that you take some time to reorganize the information every few months in the case that some information may be missing or improperly placed. It’s easy for something to become disorganized, so take the time to review your documents every few months to ensure that you have everything that you need right where they should be.
5: Plan Ahead
Now that you know all of the tips to stay organized for tax season, make sure that you plan ahead. Being knowledgeable about what kind of forms you would need to file, as well as what information you need, will prevent hoarding and make the filing process easier. Take advantage of free resources to answer all of your questions about tax deductibles and how you can file your taxes as a caregiver.