Create the Perfect Spreadsheet for Your Taxes Now so You’ll Be Ready for Next Year.
Congratulations: another tax season has come and gone. It’s time to relax and wait for your refund, right? Not so fast. When tax season rolls around next year, you’ll once again be frantically searching for receipts, statements and other documentation needed to file an accurate return. This year, stay ahead of the curve by using a spreadsheet to track your tax information throughout the year. And there’s no better time than right now, when your tax knowledge is still fresh, to create your spreadsheet for next April.
Use spreadsheet software such as Excel or Google Sheets to create a basic tax document. Using this single file to enter and update information will keep everything centralized. Give it a clear name, such as “2024 Tax Returns,” so you can reference it easily.
Divide the table into different categories
In your tax spreadsheet, create separate sections or tabs for different categories of tax information. At a minimum, you will need sections for:
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Income . This will track income from jobs, self-employment, investments, pensions, etc.
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Deductions . List anything you plan to itemize or claim as a deduction, such as mortgage interest, charitable donations, medical expenses, etc.
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Tax benefits . Track estimated expenses that may qualify for a tax credit, such as education expenses, child care, etc.
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Tax documents for the previous year . Keep a record of the details of last year’s tax return and any carryover items.
Enter all the information you have
In each section, create rows and columns to keep track of the details needed to pay your taxes. For example, in the Income section, you might need columns for:
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date of receiving
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Source of income/employer
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Amount earned
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Tax liens
For deductions, you could have columns like:
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date of payment
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Category of expenses (medical, mortgage interest, charity, etc.)
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Quantity
Get into the habit of entering information
Since you receive income throughout the year, be careful to enter the information in the income section immediately while it is fresh. Do the same for potential deductions as you incur these expenses. You can update the table weekly, monthly, or whenever you want, as long as you stick to the routine.
Keep digital copies of all your documents
Every time you receive tax documentation, such as W2s, 1099s, donation receipts or mortgage interest statements, save digital copies and attach or link them in a spreadsheet file. This creates a convenient archive of all your tax reports in one place.
Using a spreadsheet to carefully track your tax information throughout the year will save you the inevitable time and stress of having to retrieve it all at the last minute. While staying organized takes diligence, these small efforts go a long way when tax season rolls around. You will appreciate these detailed records in the future. From the most detailed travel plans to excruciatingly detailed journals and complex to-do lists , if you have a goal, that goal needs a spreadsheet.