I hope you have finished and filed away your 2015 income tax returns! I can think of at least a hundred things I would rather do than bother with tax paperwork, but the reality is that being organized can definitely help with this necessary chore. And before we lament too much, let’s remember what was written almost 2000 years ago:
“Render to all what is due them:
tax to whom tax is due;
custom to whom custom is due;
fear to whom fear is due;
honor to whom honor is due.”
Consider these questions:
- WHAT TAX RECORDS & RECEIPTS DID YOU NEED THIS YEAR?
Take time to review your final tax return again.
What information did you need?
Are you likely to need the same information next year?
Create those labels for file folders—income, investments, deductions, medical expenses, etc.
- WHERE IS A CONVENIENT PLACE TO KEEP THESE RECORDS & RECEIPTS?
Designate just one place to accumulate these tax-related documents.
I like to use a plastic file tote with hanging folders inside.
It is quick and easy to use, as well as portable.
- WHEN SHOULD I BOTHER WITH ALL THESE TAX RECORDS & RECEIPTS?
Contemporaneously or as it happens is definitely the best.
Do yourself a favor by filing them daily or weekly or at least monthly.
It is so much easier than once a year.
- DO I NEED TO KEEP EVERY SINGLE RECEIPT THAT I RECEIVE EVERY DAY?
The good news is probably not!
Ask yourself why you would need it again and when you would need it again.
Do you plan to return an item to the store?
Do you need verification of an expense?
Do you need to match the amount to an invoice or statement?
- WHAT IF I TEND TO KEEP TOO MANY RECEIPTS?
Keep a zippered pencil pouch in your purse.
Put all the receipts for one week there.
Take 15 minutes at the end of the week to review, keep, or toss.
Put the ones to keep in a gallon zip bag for that month and store in file folder.
Start the week with an empty pouch.
Enjoy having more room in your purse!
By looking back at what we needed this year, we can anticipate what we will need next year. We can create the necessary labels and files. Then when we receive those documents, we will know exactly where to put them. Think how many annoying piles that will eliminate on your desk or kitchen counter!
It won’t eliminate the bothersome chore of filing taxes, but it just may eliminate a few headaches!
What strategy do you use to keep your tax records organized? Please share your suggestions!