Tax returns: keep copies, scans, and notes

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Just a small tip for tax return season, that’s saved me a lot of grief. Whether you are doing taxes by yourself, by computer, or giving it all to a tax agent, make annotated copies.

Make a paper photocopy of your tax package in case you are audited. Scan it into your computer in case you lose the paper files. Include any notes to yourself in these packages. If you missed something until the last minute, if it took you an hour to figure out the arcane secrets of a tax deduction, if you made a weird deduction this year that you cannot repeat it next year, note it down.

Personally, I do tax returns myself. I use Excel to do the calculations and double-check by hand. Each year I keep my rough copies and my re-use Excel sheets, making minor updates every year. By now, my spreadsheets and tax returns have enough notes in the margins that I no longer forget to wait for forms from bank AAA or make a deduction for item BBB.

This will save you a lot of time, particularly if you experience no changes in your tax situation year to year.

Edit March 27th: If you use your own calculation tool (like Excel), be careful of rounding. If you multiply a number by a percentage, round it to the nearest cent.

Also, sleep on the return one night and double-check your math before you hand it in.

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