The following tips were provided by Judy Tiger, Just That Simple, our Takoma DC neighbor.
Top Tip #1 – New Check Registers Jan 1st – Every Year — For each bank account, start a new check register on January 1st.* Every year. No need to start a new book of checks, just a new register. On the front of the new register, write the year, bank name, the last 4 digits of account (for security reasons do not write the whole bank account number). For example — Best Bank, #8724, Jan 1 2025 *If you don’t have a new check register, they are easy to obtain at your bank. OR – if it is hard for you to get to your bank, Just That Simple will provide one (email us at [email protected]). *Remove last year’s check register and print clearly on the front of it as above. For example – Best Bank, #8724, Jan 1-Dec31, 2024. Put this 2024 check register with your 2024 tax planning papers (if you aren’t sure where to put it, label a new folder “2024 Tax – Bank Accounts”)
Top Tip #2 – New Folders to Gather 2025 Tax Papers (get set up now, to save some time & confusion next year!). Reflecting on the information you use to prepare your taxes every year, set up a few folders now, such as: 2025 Tax-Charity; 2025 Tax-Income (1099s, 1098s); 2025 Tax-Medical (Long-term Care, Out-of-Pocket Appointments & Prescriptions); 2025 Tax-Tax Payments (Estimated, Property) (*Note – you may need folders for other categories or different names. These are just examples. And if haven’t already got 2024 folders, now is the time to set them up. You are going to need to gather your 2024 tax papers soon anyway!)
Top Tip #3 – Use Your Calendar To Support Out-of-Pocket Medical Expenses – Since mileage and parking for medical appointments and pharmacy pickups are approved out-of-pocket medical expenses, be sure each appointment/pickup is written on your calendar to substantiate each expense in case of future IRS questions. (*Note – be sure to check this with your CPA).
Top Tip #4 – Summary of Prescription Costs – At your request, your pharmacy will provide you with a summary of your out-of-pocket expenses for prescriptions.
Top Tip #5 – Consider Making all (or most) Charity Donations from your annual IRA RMD – If you are older than 70.5, you may be able to lower your taxable income by using your annual RMD to make charitable donations. It takes some advance planning rather than responding to each charity request that comes in the mail. Talk to your financial planner, CPA and IRA institution early in the year so you can learn how to do this.
Note: These tips are intended solely as an organizing guide for taxes (to ease the scramble of getting ready to do prepare taxes each year). As needed, contact your CPA, financial planner or attorney for financial or legal advice.