Overcoming Busy

Organizing Your Taxes

January 20, 2010 by Marci

The New Year brings with it resolutions, Christmas returns, white sales and tax documents.  In the next few days we will start getting documents on the interest we paid and made at the bank.  We will receive the report of how our investments turned out in 2009.  Church and other charitable organizations will send out receipts for giving in 2009.  Income documents will make their way soon, also.  All these are important documents needed for our taxes, along with a multitude of receipts collected throughout the year.  So, where do you keep those important papers?  Can you find all of them right now?

Tax time is stressful enough without trying to remember where all those papers are stashed and then collecting them when the time comes to file.  An organized system is needed.  It doesn’t have to be elaborate.  It needs to be a system that is easy and accessible.  It has to fit your needs.

When my husband and I were first married, I didn’t keep any receipts throughout the year.  We didn’t have many deductions.  Those we did have came at the end of the year and I just put them in a file folder in our file cabinet.  When I thought we had received every necessary paper, we filed our taxes.  Simple.

When my husband and I started our first business, we started keeping business receipts and invoices for deductions.  We needed to upgrade our filing system.  We needed something that we could easily put the receipts into as we brought them into the house and something that would keep the receipts in categories.  For us, an accordion file worked great – and still does.

photo courtesy of OfficeDepot.com

I like to use the expandable accordion files with tabbed pockets and protective flaps, all held together with an elastic band.  I usually get ours at Walmart or Office Depot.   A small investment for all the organization it provides.  The files expand to fit lots of papers in various categories.  And they fold up so small that I can fit them into a drawer, on top of the fridge, in a kitchen cabinet…lots of convenient places.  If I keep the folder in a accessible spot, I’m more likely to actually use it.

Now that it is tax time, instead of hunting all over the house for my receipts and papers, I just pull out my file folder and take it to our accountant.  He loves that everything is already sorted and filed.  Usually, to make things even easier for him, I total each receipt category and then paper clip the total to the file tab.  It only takes me a few minutes and saves us lots of time at the accountant’s office.

Having all of our papers in our secure file folder makes storage so easy, too.  When tax time is over, I just mark the outside of the folder with the tax year and throw it into our tote marked “taxes” in the basement.  We have done this system so many years now that when I put my folder to the tote, I can remove one that is more than 7 years old and reuse that file folder!  (The IRS recommends that tax papers are kept for 7 years.)

What about you? Do you have any tax time organization tips?  Where do you keep your important papers?