Organize for Tax Time

Every year around this time we receive desperate calls from clients asking us to come and help them sort through papers and get tax documents in order. There are a few simple steps you can take to make it a little easier. First, have a single spot where you deal with paper, mail and receipts. Next,keep a file handy to throw tax deductible receipts into, if it's in the back of a stuffed file cabinet, it's too much work. Filing receipts and papers needs to be easy, a good system is essential. Now you may look at the system you have and feel overwhelmed. Instead of feeling like you need to start a major task in order to get a system in place going forward, just get a simple file crate and start there. As you find time and motivation, you can take a couple file folders at a time and weed out the drawers. Another thing you can do to help keep track of your receipts and tax related documents is make sure you only save what you need. If you keep too much, you can't find what's really important. When saving receipts, first create some parameters. Is it tax deductible? Will you need it in the future? Might you return this item? If not, you can toss it. Another must is a yearly tax file. Create a 2009 tax file now. Keep forms and important tax related documents in it. Use a separate folder for tax deductible receipts. Depending on how many you have, you may want to make categories. If you deduct most of the receipts and bills you pay, you may want to make files labeled January - December 2009. Tax time, like any other organizing project takes well thought out systems and good maintenance habits. Follow these ideas and preparing your taxes will be much simpler and less stressful.