Filing our income taxes: things we’ll remember for next year!

As we posted Saturday on our Facebook fan page, this weekend we were able to knock out our income taxes!  Many thanks again to the big ol’ Money Crashers giveaway that left us with a free copy of TurboTax Premier [affiliate link].  The process is, to some small degree, enjoyable, as we think about the past year and how God has continued to provide for us in a really big way.

The funny thing is that, although we’ve been using some variation of TurboTax for the last several years, the whole process always ends up taking more time than we ever expect it to.  We begin our taxes well-organized and prepared to complete it in a reasonable amount of time, perhaps an hour or so.  But there I was on Saturday afternoon, and before I knew it, 3 hours had passed me by.  Part of it seems to be that there are things about filing our taxes that I seem to forget each year and then remember only while I’m doing it.  So, here are a few items that we’ll keep in mind as we go through the year ahead and prepare for filing our income taxes in 2011:

1. A file folder does not mean one has reached organizational greatness. As different tax-related statements come throughout the year, we tend to put them in a specific tax folder and not think much about them until the time for filing comes.  This weekend I quickly realized that we might have benefited from organizing these documents into different categories prior to logging in to TurboTax.  It meant that I couldn’t really get into the rhythm of going through the program, as I was working to get mortgage/property tax statements, listings of charitable contributions, and other W-2 and income items all into place.
2. Store receipts are actually important. We’ve shown you our budget and receipt-keeping process, but I continually forget that it’s important to keep track of the purchases we make online.  The state of Michigan requires that you claim whatever online purchases you’ve made for which you’ve not paid state sales tax, and since we didn’t keep track of that this year, we ended up having to pay the maximum amount of tax ($50) for an assumed amount of $1,000 in online purchases.  Since we didn’t want to take the time to figure out what we actually spent online without paying sales tax, we took a bigger hit than we probably should have.  Better planning will help us avoid this in the future.
3. Use a great new tool — ItsDeductible. We weren’t aware of this great online tool, which allows you to keep track of charitable donations throughout the year and then import them into your TurboTax online or desktop software when tax time comes around.  We believe that part of good stewardship means making sure that you receive credit from the government for the charitable contributions we make during the year — it helps to  ensure the financial freedom to continue giving.

So, these are just a few ideas we’ll put into place as we look ahead to this coming year.  As with anything, the more refined the process, the more easy and enjoyable the end result can be (if that’s possible when it comes to filing taxes).  What are your tips for tax time and planning in the year ahead?