Organizing tax documents

0:01- Hi everyone. So if you've never filed taxes before and are now about to embark on the joy of filing taxes for the first time, I want to give you a few tips and make you think a little bit about how you might wanna organize going into it to make things as easy as possible.

0:17Back in the day, decades ago, there were two really hard parts to filing taxes. One, making sure you had all the information that you needed. And then the second part was navigating the different forms and reading the book and doing all the math yourself. Now, luckily, most of us have access to some online tools, and many of them are free in many cases.

0:38And so if you have the information, a lot of those tools take care of it, especially if you have relatively straightforward taxes. But that still doesn't solve the how do you get all of your information in one place, even if you get someone else to do your taxes, a human being to do it, the first thing that they're gonna ask for is all of that information.

0:53And if you don't have it, you're going to be scrounging around all of the time. So what information do you need? Well, if you are just employed, and that's about it for your taxes, and it's pretty straightforward, the number one thing you need is your W2. That is what your employer will give you.

1:12It'll have actually some of your information on it that you'll also need, like social security number, date of birth, but it's also good to have social security number, date of birth for dependents, for partners, children, et cetera. But those, that W2 is going to give you a lot of the information, if not all of the information if you have relatively simple taxes on the amount, how much you've already paid into social security, what your taxable income is, how much you've already paid into taxes, and then the software, the person that's helping you prepare your taxes can figure out how much you owe or what, or what your, what your refund might be.

1:43Now, most people don't just only have a job and just get that W2. Some people might, for example, be contractors. They might have a W2, but you're also getting income from investments. You're also getting in, in income from your bank account in terms of interest.

1:59Maybe you're a contractor and you have a job. So that you'll also see things like 1099s and there's a bunch of different 1099s, and you'll get it from your bank. You'll get it if you're a contractor for someone. Those are also very useful. And if you have those 1099 forms and there's different types, there's 1099 NEC, and T and G, you should be able to find when you're filing the appropriate place to fill that information in is you can feel pretty good that you, you're going to have the right things there.

2:28Now, above and beyond that, there are things that you might be able to deduct from your taxable income. These things could be things like healthcare expenses, education expenses, charitable donations. Now, it depends whether you use the standard deduction or you itemize.

2:44Standard deduction, everyone just gets the same deduction. But if you're going to go put, take those receipts on your healthcare expenses that qualify or education expenses, you're itemizing, you're giving each item for the deduction, and there you just should make sure that you have it all in one place.

2:58You have all of those receipts or the proof of donations in one place. You should also have a good sense of what you've already paid into taxes. Once again, your W2 offers that at least from your, from your, your payroll. But maybe you've paid other taxes. Maybe you proactively paid some taxes knowing that you've underpaid in the past and you don't want to pay penalty.

3:18Now, I'll tell you what I do these days, and I don't claim to be the most organized person. I'm trying to get more organized every day is my employer, Khan Academy, does send me a W2, but we also have online access to it and many employers now have that. So look into that.

3:33But if you get a mail, a physical mail from your employer in January, February, don't throw it away. It's probably your W2. You're going to need it to fill, fill out your taxes. You'll probably get in the mail, things from your bank, important tax document. It's probably the 1099 that tells you how much interest you got.

3:51If you happen to lose it, it's not the end of the world. Most online bank accounts you can now go and not only see statements, but you can also see some of the digital versions of these forms. Our family, we have some other things, and I just have to make sure that, you know, I'm able to keep track of the expenses and all that.

4:09That gets more complicated. But once again, I look at my online, I lean heavily on what my employer Khan Academy gives me digitally through our, our employer hub and also what I go get on my bank accounts. And I use my bank accounts, not just for their statements, but also I can see, I can keep track digitally of all of the other income or expense sources that I might have.

4:32I'll let you go. I, you know, I don't wanna, I don't wanna ruin all of the joy of filing taxes, and I can assure you that if you get somewhat organized about this and you don't lose these documents, or at least know where you can get 'em, especially digitally, and you keep 'em in one place, maybe in either physical or digital folder or both, the tax filing process will be a lot more streamlined.

4:53I'll, I'll tell you, most of the pain for me is digging around and finding all of this. And every year I say I'm gonna keep better track, and I will, and I tend to do it better and better every year, but I'm still not there. So it's about time that you start that journey as well.