Being Ready for Tax Time

In the next couple of months, you'll want to assess your paperwork situation in regards to preparing tax returns. Whether you do it yourself or pay a professional, it is important to keep records all year long, and you'll appreciate your recordkeeping on April 15th.

For each tax year, get a hanging folder and add a tab labeled something like "For 2009 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. Then, remove the pile of receipts or papers within each folder and tally them up. Once they are paper clipped, add a sticky note with the total to make the data entry part easier. Remember, you don't have to do any organizing, totaling or such to the things you put into the folder until the year is over.