Tax Deadline Day

Today is April 15th, hopefully by now your taxes are filed and finished. Use today as an opportunity to weed out the old and make room for new files and papers. Get everything related to your 2008 taxes together and place them in a bankers box labeled 2008. Hopefully by now you have created 2009 folders and papers are accumulating in them. As you use the files and they grow through the year, you are going to need to make room for incoming papers. Getting 2008 out will open up some needed space. I suggest archiving the past 7 years paperwork in bankers boxes. After 7 years, throw away all of the documentation and keep only the tax return. For specifics on what to keep and what to toss check out our Records Retention Schedule. Spending time on having a good system to keep the paper flowing is a worthwhile investment. When papers have a lifespan and you know how the system flows, it's so much easier to find what you need when you need it.

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.