Tax Brake with Robert G. Nath, Esq.

Note that it's three months before the filing deadline. It is never too early to begin preparations for filing your return. Here's a quick, and easy, guide on the process.

First, gather your records. If you've been reading this column, you already have all your records together and organized in electronic or paper folders, marked business and personal, and subfolders for each tax category. On the other hand, for that small percentage of you who have not done this, it's not that hard.

Go through all your records: If it has a number on it, get it in one place. The paper you can throw in a box. The computer data you can print out. Then start sorting. Put income items in one folder, deductions or expenses in another. If you track your expenses by computer, use the “find” expression to locate things like “mortgage,” or “state and local income taxes” or whatever categories like this you use. Gather your W-2s and 1099s and set them aside as they come in the mail. Keep an eye out for those, which are late. The law requires that they be mailed to you by January 31. Notice anyone relevant if you have moved; the burden is on YOU, not them.

On the expense side, decide “deductible vs. non deductible” as an initial sort. Put aside the clearly non-deductible items. Then categorize the deductible items into a checklist. Use your prior year return as a guide; you'll have mostly the same items, just different amounts.

Then ask yourself whether there are any new items. New charitable deductions, alimony, job expenses, etc. Use Schedule A as a guide. Finally, begin putting numbers on a return. Use a pencil; they will change. Once a number has been transferred to a return, take the paper and put it in a “done” folder.

The above is only one of many methods, and variations, that can come to mind. Any system that is efficient and works for you is OK. For those who use a computer tax prep program, that's even better. Even there, set aside the papers once you have entered the number.

Good luck.

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