Recipe for Receipts

Of course there are many different ways to deal with the deluge of receipts that continually fill up your wallet and pockets, what's the best way to organize them? That answer really is individual. When we work with a client who has "receipt clutter" we offer several suggestions, here's a few:

File them. The good old fashioned way of storing receipts-file them away. However, it's not necessary to save all receipts. Keep what you think you may need for returns, personal records or tax purposes - the rest can go. I use one main credit card and keep all the receipts in a convenient file. When the statement comes, I attach the receipts, pay the bill and file the statement with my monthly paid bills. I keep a file for each month, at year-end, they go into a bankers box and into long-term storage.

Stash them. You can also keep a convenient space inside a drawer to keep all of your current receipts. This way, when you empty your pockets/purse, there's a place to put them. Be careful to make sure you clean out this spot frequently or it will be another source of chaos.

Scan them. Here is a terrific system that allows you to easily scan any receipt and organize it into a file system with the software that's included. Check it out: http://bit.ly/4A1rhc

Toss them. When in doubt, throw it out. We don't need every receipt for every purchase. Depending on how well you itemize and budget your spending, you can keep either very detailed records, or none at all!

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.