It sounds complicated but it isn’t, it grew organically from learning from my tax prep each year. I have just basic Excel skills and like the computer to do the math for me to avoid simple math errors.

I store the documents in a little drawer in a desktop “chest of drawers” organizer…and each category is paper/binder-clipped together: business, education, charitable, health/medical, etc.

Takes very little effort and makes tax prep painless! I used to hate slogging through the shoebox and the calendar at tax time trying to make sense of the chaos. I would file extensions to procrastinate on doing it. A little work steadily throughout the year makes life so much easier.

I just clip all the W-2s, 1098s, 1099s, 549s, and K-1s together in their respective little stacks inside a manila file folder. Then I print out a Quicken category report–because I charge everything and enter every transaction in Quicken, it creates a detailed summary of all my income and tax-relevant expenses.

And I’m with Kyle in wishing this stuff were available electronically. Also that the government would put some teeth in the rule that people have to get tax documents to you by the end of January! I’m still waiting on a K-1. The chuckleheads who run the limited partnership in question ALWAYS wait until the end of March to send them.

Each year I take one of those envelopes and put *next year’s* date on it, and keep it in the same file cabinet with the past completed tax information. This is the envelope into which I put all of those receipts, etc. which may be needed for next year’s taxes.

So when the time comes to do taxes, I grab that envelope – when I start it has all of the info I need to do my taxes; when I am done, it contains the completed tax forms, etc.