Start off each new tax year with confidence and be ready to claim as many deductions as possible.

One of the fastest and easiest income tax tips is to organize and prepare your receipts so that you can maximize the benefits at the end of the year. Too many times people miss out on possible deductions because they misplace receipts or are confused as to what slip of paper is applicable to what. Or they dump a shoebox full of receipts on their accountant’s desk and can’t make heads or tails out of the mess.

The best way to start off is with the purchase of file folders, small envelopes and a secure file holder. This can range from a simple accordion file holder to a filing cabinet depending on how complicated your tax receipts can be. Don’t forget that in some cases these purchases themselves can be deducted!

Next, set up one area of your home or office specifically for the storage and organization of your tax receipts. This can be as simple as a bulletin board in one corner of your kitchen to a desk drawer to an entire desk. Designate a separate folder for each and every month of the year. Take the smaller envelopes and write on them exactly what sort of tax receipts you plan to put in each one. For example, a salesman may want to assign such names as Dining Expenses or Gasoline Receipts while a freelance writer would use such topics as Mailing Expenses or Reference Materials Receipts. And don’t forget your Charitable Donations! With each envelope clearly labeled as to what’s going inside you’ll have less chance of getting confused and placing the receipt in the wrong envelope.

Place one of these labeled envelopes into each month’s folder or space and then use them to sort out your receipts at least once a week, if not immediately after receiving them. Too often many people find themselves with a fistful of tax receipts or possible deductions without any idea of what they were originally for. Even scribbling a short note on the back of the tax receipt at the time is better than nothing.

But wait, you ask – why separate them by months when you just need one final total in each category by the end of the fiscal year? Well, here’s another income tax tip! There’s nothing worse than sitting down and trying to prepare for your income tax than facing a huge unwieldy stack of paper receipts, even if they’re all in the same category. Each month sit down and add up the individual envelopes so you have a running total available. This means that at the end of the year instead of having a plethora of paper to add up you have only twelve totals and you have the total in that category quickly and easily. This income tax tip will lessen the pressure on you.

One of the biggest errors most people make is to underestimate the number of possible tax deductions they may be able to claim. By making a routine of filing any and all tax receipts as soon as possible you make it easier at the end of the tax year to find out what’s eligible and what’s not. This income tax tip is a good way to not only lessen the stress and tension that many people experience at tax time but also allow you to get the biggest refund that you can or at least claim the maximum amount of deductions.