Congrats: Another tax season has come and gone. Time to kick back and await that refund, right? Not so fast. When tax season rolls around next year, you’ll once again find yourself frantically searching for receipts, statements, and other documentation needed to file an accurate return. This year, get ahead of the game by using a spreadsheet to track tax-related information throughout the year. And there’s no better time than right now, when your tax knowledge is fresh as can be, to make your spreadsheet for next April.
Use spreadsheet software like Excel or Google Sheets to create a master tax document. Using this single file to input and update information in will keep everything centralized. Give it a clear name like “2024 Tax Records” so you can easily reference it.
Divide your spreadsheet into different categories
Within your tax spreadsheet, create separate sections or tabs for different categories of tax information. At minimum, you’ll want sections for:
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Income. This will track income from jobs, self-employment, investments, retirement distributions, etc.
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Deductions. List out anything you plan to itemize or claim as a deduction, such as mortgage interest, charitable giving, medical expenses, etc.
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Tax credits. Track estimated expenses that may qualify for a tax credit, like education costs, childcare, etc.
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Prior year tax documents. Keep a record of last year’s tax return details and any carryover items.
Input all the information you have
Within each section, create rows and columns to track the details you need for tax time. For example, under Income you may want columns for:
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Date earned
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Income source/employer
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Amount earned
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Tax withholdings
For deductions, you may have columns like:
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Date paid
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Expense category (medical, mortgage interest, charity, etc.)
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Amount
Get in the habit of entering information
As you earn income throughout the year, be diligent about entering the details into your income section right away while it’s fresh. Do the same with potential deductions as you incur those expenses. You can update your spreadsheet weekly, monthly or whenever is convenient, as long as you stick to a routine.
Keep digital copies of all your documents
Any time you receive tax documentation—like W2s, 1099s, donation receipts or mortgage interest statements— save digital copies and attach or link them within your spreadsheet file. This creates a handy archive of all your tax records in one spot.
Using a spreadsheet to meticulously track your tax information throughout the year will save you the inevitable time and stress of having to reconstruct it all at the last minute. While staying organized requires diligence, that small effort goes a long way when tax season arrives. Your future self will appreciate having these detailed records ready to go. From the most thorough travel plans, to excruciatingly detailed journals, to elaborate to-do lists: If you have a goal, that goal needs a spreadsheet.
