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Each Monday morning, I plan to post my thoughts on Organizing Your Finances. Through this series, I hope to share a tip or two that address a common problem that many of us face in our daily lives — that of organizing our finances. I’d love to hear your thoughts on this initiative and would love it more if you could share a tip of your own. And, as always, do spread the word if you find this useful.
As I have written before, when you file your income tax returns, you’re building a history about yourself — that you exist and earn. Your annual income tax returns are therefore one of the most important documents that you need to keep organized and available on hand.
They’re useful in quite a number of situations. For example:
- When you apply for a loan from a financial institution
- When you apply for a visa
- When you need to answer an income tax audit
Given their significance, here’s what you should do to organize your income tax returns:
- Gather all your income tax returns.
- Sort them by year — in descending order with the most recent one on top and the earliest one at the bottom.
- File them together.
- Label this file “Income Tax Returns.”
- Subsequent returns go directly to the top of this file.
And in case you can’t find one or more of your returns, here’s what you could do.
What do you think? Do you already have your returns organized? How did you go about it? Share your thoughts in the comments.
Thanks for reading this article. I'd love to hear your opinion. Please use the comments section below to share your thoughts. I frequently write new articles that also cover several other aspects of personal finance including credit cards, financial goals, health insurance, income tax, life insurance, mutual funds, retirement planning, and much more. You can Subscribe through Email and receive new articles directly in your Inbox or you can Subscribe through the RSS Feed and receive new articles in your feed reader.