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Tax Tip: Save Time Filing Your Taxes

Tax Tip: Save Time Filing Your Taxes

I’ve got a tax tip that won’t save you any money, but it will save you something far more valuable . . . time. The IRS says the average American spends 21.4 hours completing their 1040 tax return. It’s this “hidden” tax — the sacrifice of not your dollars but your other 8 hours — that you can reduce. And the good news is this tax tip won’t increase your risk of an IRS audit.

Here are three ways to save time filing your taxes:

| 1. Mint.com |

I love this free service. If you haven’t heard of it yet, do yourself a favor and check them out. Mint is an online budgeting site for people who hate budgets. They are magicians. Through sleight of hand, your budget will appear with very little effort on your part. But in addition to helping you budget and providing cost-saving offers, the service is brilliant at organizing your financial life. It consolidates all of your savings, investment, credit card, and other financial accounts onto one page.

When it comes time to file your taxes, you can quickly run reports showing your medical expenses, charitable contributions, business expenses, etc. Forget the shoebox because you’ll have all of your data categorized and ready to go.

Mint was recently purchased by Intuit, the company who makes QuickenQuickBooks, and the do-it-yourself tax prep software, TurboTax. Although they wouldn’t confirm, my guess (and hope) is that you’ll be able to export your Mint data directly into TurboTax — thus saving even more time.

| 2. Tax Organizer |

One of the most important IRS rules is to keep copies of your receipts, donation forms, etc. If you’re like me, organizing all of this stuff is a nightmare. Fortunately, you can save yourself a lot of time and hassle. Here are a few options:

Option 1: Get big box. Write “Tax Stuff” on big box. Dump everything and anything remotely related to taxes into this box throughout the year. Primitive? Yes, but it actually is effective and saves a ton of time.

Option 2: Get a fancy tax organizer. Instead of the dump-everything-into-one-box approach, these organizers have different sections for medical receipts, 1099s, charitable donations, etc. Google “tax organizer” for more info.

Option 3: Go digital. Scan all of your documents into PDFs on your computer. You can then use a program such as FileCenter to easily and efficiently organize the files. When it comes time to do your taxes, everything is ready to go.

| 3. Outsource |

Hire a CPA to do your taxes. This will undoubtedly save you time, but because you still have to be somewhat organized, I’d still recommend Mint and/or a tax organizer. Is it worth the cost? In addition to saving time, a good CPA should also be able to make strategic recommendations that can save you money.

If these time-savings tips are not sufficient, you could always move to Dubai, which has no income tax.

(the english way image by Ludmila VilarinhosCC 2.0)

Are you ready to create more money, time, energy, and passion in your life? Learn how to live your best life now with these free resources:

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You can also join a community of passionate people at Richer Life who want to achieve more in life and at work. With your free membership, you can participate in conversations I have with experts, celebrities, authors, and thought leaders that are laser-focused on practical ways to drive more money, motivation, and meaning into your life. Take the first step toward creating a better life by joining Richer Life for free now!

 

 

Read more: Life, Money

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Robert Pagliarini

Robert Pagliarini is obsessed with improvement, making the most of his time and energy, and inspiring others to live life to the fullest by radically changing the way they invest their time and energy. He is the founder of RicherLife.com, a community of passionate people who want to learn and achieve more in life and at work and the co-founder of The Band of Brothers Foundation, a non-profit helping kids around the world.

10 comments

+ add your own
4:25AM PDT on Aug 6, 2012

great info, thanks

6:24AM PDT on Apr 16, 2012

thank you

6:52AM PDT on Apr 11, 2012

Thanks. Haven't had to do my taxes in many years - my partner actually enjoys doing them!

12:19AM PDT on Apr 11, 2012

Thanks for the info

5:29AM PDT on Apr 9, 2012

Thanks

7:55PM PDT on Apr 8, 2012

all I can say is "UGH!". These are pretty good ideas, though.

9:44PM PDT on Apr 7, 2012

Oh, the night mare of taxes is here again!

9:08PM PDT on Apr 7, 2012

I have an accounting ledger which I faithfully use to record all pertinent transactions throughout the year, so that all I have to do is plug in the figures when it's time to file taxes.

9:57AM PDT on Apr 7, 2012

Another simple way of organizing is to use 9x12 brown clasp envelopes labelled with the categories. Simply write the receipt down on the envelope as you put the receipt in the envelope and add it all up when you are ready to file. If you aren't that disciplined, you can stuff in all the receipts into the correct envelopes and then sort and list them at tax time. All the envelopes are then bundled up and stored with your copy of your filed taxes. Everything is all together if you are audited.

9:17AM PDT on Apr 7, 2012

Good advice!

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Disclaimer: The views expressed above are solely those of the author and may not reflect those of
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