Organizing, Redesign & Staging

Wednesday, January 23, 2008

Organizing Tax Time Throughout the Year

Thought about tax time yet? If you are planning on receiving a rebate, you're probably are; if not, you might wait until the last day you have. If you enter into a search engine "organizing taxes" you will get 6 million results. Clearly, having paperwork organized for the tax return process is important. But having a complex, pre-done, purchased organizing system is not necessary.

I think client sometimes hold on to everything because they don't know what to hold onto, and are afraid they'll need it. At the beginning of the year, set up your system so that you are consistent throughout the year, and can access everything easily come tax time next year. Wondering what kinds of paperwork you need to keep? There's lots of lists out there in cyberspace, but you can check out this one.

For each tax year, get a hanging folder and add a tab labeled something like "For 2008 Taxes". Think ahead to what the tax returns require, then simply create a file folder for it. If you deduct for a home business or your husband's work expenses, set up a file titled that and anytime you get receipts or documented expenses in that category, stick it in there. Keep track of daycare costs for tax purposes? Make a folder titled "Daycare Payments". Don't worry about organizing the contents -- just getting in the right folder is sufficient now. All the file folders go into hanging folder(s).

Do this filing throughout the year, and when tax time comes around the following calendar year, pull out the hanging folder. You may still need some additional files or paperwork (i.e. W-2 forms you receive) but otherwise everything is together. It is at this time I grab the pile of receipts or papers within each folder and tally them up. Once they are paper clipped, I add a sticky with the total to make the data entry part easier. Remember, you don't have to do any organizing, totalling or such to the things you put into the folder until the year is over.

Good luck!