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Organizing Your Tax Paperwork Before April 15

Three tips for making tax time easier

by lolagoetz  |  5840 views  |  1 comment  |        Rate this now! 

We all dread tax time. There’s something about all of the paperwork, headaches, and hassles that make most of us want to avoid anything to do with it the other 364 days of the year. But a little bit of planning can go a long way towards reducing your tax season stress. With a new tax season just weeks away (for most of us), maybe it’s time to get organized now. When you breeze through your tax preparation next year, you’ll be glad you did.

1.) Simple is best. When organizing your paperwork, don’t overwhelm yourself by making it too complicated. Simple is easier to follow. And if your system is easy to follow, you’ll be more likely to stick to it. The simplest thing to do is take everything tax related and put it into one folder. Throughout the year, toss in everything you think you’ll need at tax time: pay stubs, un-reimbursed business expenses, medical receipts, charitable donation receipts, daycare expenses, and anything you think might be a write-off. Don’t wait until December to do it. Every time you clean out your wallet or sit down to pay bills, toss the relevant paperwork in your tax file. When you get ready to do your taxes, you’ll still have to organize the types of expenses, but at least you’ll have everything in one place. That alone can save you hours of looking for things. And if you wait until April 15 to prepare and file, you’ll be glad to get done before midnight.

2.) Organize by category. The next step is to use an accordion file to divide up your tax receipts by category. Put all of your work-related expenses in one section, medical and dental in another, and childcare in yet another. I organize mine by the categories in my tax software, since I use the same one each year. That way, all I have to do is total the receipts and enter the amount. When I sort up-front, it saves hours during data entry.

If you use an accountant, ask him or her what categories you should divide your receipts into. It will save them time when they are doing your taxes -- which saves you money. But a big folder of receipts is better than nothing at all, so if you don’t have time to file in categories, at least designate a tax file and drop everything into it.

If you’re self-employed and filing taxes quarterly, it’s even more important that you stay organized and on top of your paperwork. You don’t want to miss a filing deadline because you were too busy to save your receipts in one place.

3.) File receipts regularly. Whether you organize your receipts daily, weekly, or monthly, make sure you set aside time regularly. Don’t let the pile get so big that you get overwhelmed and decide not to do anything. And if you do let it get away from you, you can get back on track easily. Just take five or 10 minutes in the evening a few days a week, or a half hour on the weekend, and get as much done as you can. In no time you’ll get through the paperwork piles and be ready to go for next year.

About the Author

Becky Scott is a freelance writer/editor. She has way too many shoes, not enough flattering pants, and more hair scrunchies than one person should ever own. She loves to find a great deal on cute clothes and handbags, even though her closet protests that enough is enough (so does her husband). She is currently head-over-heels in love with her infant son and doesn't expect that to change anytime soon. She lives in San Diego with her husband and son.

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1 comment so far...

  • I used to toss receipts into a pretty box on top of the fridge, the idea being that I'd file them once a month. Nope. They stayed in the pretty, and increasingly dusty, box for months. Boo.

    This year, I've put a small desktop file holder on my desk. Every time I have a receipt, it goes into the appropriate file, and since it's right there in the dining room, not hidden in a filing cabinet in the basement, it takes about two seconds.

    Since I work from the home, a LOT of receipts are business-related. (Like utility bills, grocery bills, household maintenance...) The files are labelled not only with the category in question (food, memberships, craft, equipment), but also with the number indicating which line of the tax form they apply to.

    Much, much better. Now I just need to get new batteries for my calculator...

    Flag as inappropriate Posted by MaryP on 20th March 2008