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What The Heck Is A W-2? A Beginners’ Guide To Filing Taxes In 2015
“I would caution people,” says Clarence Kehoe, head of the tax department at accounting firm Anchin Block & Anchin, “under the old garbage in, garbage out scenario – the information you get out of that computer is going to be as good as the information you put in. You have to be careful.”
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Kehoe points out, “Planning for your taxes is a yearlong event, not something you do on April 14th.” Adding, “Maybe this is just me because after a little while you lose your memory, but it’s very very hard to remember what you did on January 1st a year and a half later.”
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Kehoe recommends keeping a file – paper or digital – of items that may be relevant to your taxes. In addition to the W-2 your employer will send you at the start of tax season (generally by the end of January), investment account statements and form 1099s for miscellaneous income, this file could include charitable giving receipts, unreimbursed job expense receipts and paperwork showing interest paid on student loans (your loan providers will send you a 1098-E showing total interest paid). The self-employed may want to consider saving receipts digitally with a system like Neat, which allows you to categorize expenses for tax purposes as you scan them in.