With less than a month away to file your taxes, how are you feeling about now? Are you feeling anxiety because you haven’t even started getting your tax related papers together? Maybe you haven’t even thought about starting yet?
Here are 10 tips that will help you to get your taxes organized so you can simplify your life and thrive. Wouldn’t it be nice to have all your tax related papers in one spot, where you can find them in a matter of seconds, and not “clutter up” valuable space with past tax returns?
- Have one place to put all those tax related papers & receipts. A box, envelope, accordion file, etc.
- Keep the system simple! (KTSS – my own take on KISS). The goal is to have your papers and receipts sorted, contained and in one spot. No need to make the system complicated with fancy coding or keeping the information in an inconvenient location.
- Use a software program such as Quicken and Quick Books to track your expenses & balances. They are great at helping you sort your tax related expenditures. Make sure to keep track of your physical receipts.
- To eliminate storing the physical receipt, consider investing in a receipt organizing scanner such as NeatReceipts. Less paper, more space!
- When organizing your current tax year, create a system for next year’s tax related papers.
- Keep all information pertaining to a specific tax year together in one spot. For example, if you need to hold onto utility bill statements for 2009, keep them with your 2009 tax return. The same goes with pay stubs, cancelled checks, etc.
- Where do you store past tax returns? Keep the current tax related papers and last year’s tax return in a convenient location in your home office or closet. The other 6 years can be stored in your “deep freeze” storage (in the garage, off-site, in a fire safe or attic). Don’t use up valuable and limited space in your file cabinet located in your office.
- If you are going to work with a tax preparer, write a list of questions before your meeting so you don’t waste time or forget anything.
- So how long do you need to keep all this stuff? Check out Suzi Orman’s quick guide on “What To Keep and What To Get Rid Of”.
- When you start working on your taxes, it’s also the perfect time to sort out the old information you no longer need. To help avoid identity theft, shred information that contains your personal information.
To read more tips and ideas on how to simplify your life, check out past blog posts in the left column of this website.
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Here are a handful of additional tips from a bookkeeper…
Try to get Year-end printouts from Credit Card Companies that you use during the year that have tax deductale items. Saves time with everything for the year categorized and totaled.
Tax Preparers don’t necessarily need all your receipts. They just need to know that you can support any deductions you are claiming. Have receipts ready for questions.
The best thing to do is have all your Income and Expenses posted into QuickBooks (Quicken is not as good as it is not set up as an accounting tool, and reports run from Quicken have have items listed in more that one category,leaving a chance for dupliocation) Many Banks now allow you to download not only your statements, but also your activity right into QuickBooks. There are a few tricks, but easy to learn and keep up.
Use the Bank Reconciliation feature in QuickBooks. If you can show 12/31/09’s Bank Statement matching your reconciliation, you’ll save your Tax Preparer lots of time and it’s much more defendable.
I like the idea of everything in one place. You should also bring in your last years tax return if your current preparer didn’t prepare last years. Many items carry over from year to year.
Another way to make it easier is to fill out the Organizer that your accountant sends you. Put copies of any supporting documents (property taxes, Mortgage statements, 1099’s etc.) with the orgainzer. This will save you money becaquse your Tax Preparer won’t have to copy key items they need to keep.