Tax season is behind us (finally!) and, while most people are ready to move on, it can help to reflect a bit on a few things that might make tax time a little easier next year. One is knowing what things to track for taxes. Another is having a system in place to help you track tax-related items.
Regardless of whether you take the standard deduction or itemize, track charitable contributions. Even people who do not itemize can deduct up to $300 (up to $600 if married filing jointly) in contributions on their federal return, and Colorado residents can deduct contributions over $500.
The following is a list of other things to track for taxes.
They may not be captured in tax forms, but you need to include them on your tax return.
Income not reported on a W2, 1099, or a K-1 (such as rental property income)
- Rents and other income associated with a rental property, including tenant security deposits
- Expenses (improvements, repairs, taxes, property management, mileage for maintenance trips)
- Number of days you stayed in property for leisure
- The number of days you stayed in property to perform maintenance
- Number of days you rented it to others
- Expenses that were not sent directly to institution (computer, books and supplies, etc.)
Dependent care tax credit
- Qualifying childcare costs
- Sale of home-keep a copy of the settlement statement
- If someone in the household goes back to work, changes jobs, or gets a significant raise or decrease in income
- Unreimbursed medical expenses in excess of 7.5% of your adjusted gross income (AGI) can be deducted. This is a very high threshold but a large, unexpected health event at some point during the year may push you over the limit and allow you to deduct expenses. If you aren’t expecting to qualify, do not spend a lot of time tracking these expenses. If, however, you can “tag” unreimbursed expenses in your cash flow system, or put a copy of the invoice into a file, then it will be easier to add up your payments if you do have an expensive health event.
- For medical expenses paid for or reimbursed from your Health Savings Account, you should keep records which support that the distributions from your HSA were used for medical expenses.
- Any significant home improvements (those that increase the value of your home- These expenses may add to the cost basis of your home, which is important someday when you sell. Be sure to save a copy of these expenses with your home purchase information.)
- Items qualifying for energy efficient credits (
If you are an eligible educator, you can deduct up to $250 of unreimbursed expenses such as classroom supplies, professional development expenses, books, etc.
Colorado 529 plan contributions
Contributions to a Colorado 529 plan are deductible on your Colorado tax return.
Put a system in place for tracking tax items:
If you don’t already have one, put a system into place to track these tax-related items, and consider using a multi-part system to track tax-related items:
- If you use a cash-flow system like Mint, use tags to flag tax-related transactions. At the end of the year, you can download a list of tagged transactions and sort them as needed.
- Keep a file folder wherever you do paperwork (kitchen, office, bedroom). Use the file to store paper copies of tax-related documents.
- Use flags (or a folder in your email system) to store tax-related emails (donation and tax payment confirmations, etc.)
- Each year, before meeting with your CPA, upload copies of all the above to an electronic folder, organized by year, with sub-folders based on topic (income, property, child, charity, etc.). This will make it easy to find information and submit it to your tax professional.
Related: If you make charitable contributions and claim the standard deduction on your federal tax return, you may benefit from the Colorado Charitable Contribution Subtraction.