![]() |
![]() |
|
Text Version
Beauty & Self Books & Music Career Computers Education Family Food & Wine Health & Fitness Hobbies & Crafts Home & Garden Money News & Politics Relationships Religion & Spirituality Society & Culture Sports Travel & Leisure TV & Movies
|
Organizing for Tax Time Unless you're an accountant (and perhaps even if you are), the lead-up to the tax filing deadline in April probably isn't your favorite time of year. Dealing with taxes can seem like a chore in the best case scenario; add disorganization to the mix and you're faced with a task that's a serious headache. Here's the good news: it's not too late to get organized before filing your 2005 return, and it's the perfect time to get a good system in order for your 2006 records. Use these tips to bring some order to the tax preparation process and to spare yourself some stress. Create the files you need It sounds so simple, but it's a step that's easy to overlook: organizing and keeping tabs on your tax-related papers is much easier if you have an appropriate filing system in place for them. You don't need an elaborate, multi-part system (unless you want one) to keep your paperwork in order. You just need a dedicated, easy to access spot for them and some well-labeled folders or accordion files. Your tax paperwork filing system should allow you to divide your papers based on how you file your taxes. If, for example, you use multiple schedules and forms or itemize numerous expenses or deductions, your system will need to have sections for each type of supporting document you'll use. On the other hand, if you stick with EZ forms and don't itemize anything, your system can be much more basic, offering only space enough to stash your tax forms, booklets, and proof of income. Get it together Once you have some sort of filing system in place, use it! Make it a habit to file any new paperwork you receive as soon as it reaches you; that way, you'll avoid the risk of losing it and can rest assured that all of the documents you need will be in one spot when it comes time to file. Sort your receipts If you itemize expenses or charitable contributions, it's crucial to have supporting paperwork, which usually means receipts and gift acknowledgements. Anyone who's ever had to dig through a box full of receipts to find the one they needed--or who's paid someone else to do the same--knows that it's no small feat to organize receipts after they've accumulated. Nevertheless, it's worth getting your 2005 receipts in order and, at the same time, getting into the habit of categorizing your new receipts in 2006. Start by deciding what categories you need; the schedules you use when preparing your taxes (such as Schedule C) can serve as a good starting point, as can the categories in any tax or bookkeeping software you might use (such as Quicken). When you've got your list of categories, choose a receptacle to hold your receipts. I'm partial to a check file, which has several dividers with tabs that can be labeled; it's large enough to hold the receipts I collect over the year and small enough to fit in my desk drawer. (See the link to Tax Organizing Supplies on the right hand side of this page for some great filing options.) Labeled envelopes or file folders can work, too. If you're sorting through receipts you haven't yet entered into your books, now's the perfect time to do that. You might also want to keep a running tally in each category as you sort. This might be time consuming or tedious work, but it's well worth the effort in the end. Archive, then look ahead Sooner or later, your taxes will be filed and you'll be ready to get your 2005 paperwork out of your sight. Rather than putting it back in a filing drawer (or leaving it sitting on your desk), take the time to archive it with the paperwork from past years. Keeping a copy of your tax return and all of the supporting documents together in one place will make it easy to refer back to if needed and will keep older papers from cluttering up your new and existing files. In addition to archiving the papers you're through with, take the time to create tax-related files and a receipt organizing system for 2006, then put them to use. Categorize receipts as you get them and file any papers you'll need for taxes as they come in throughout the year. When tax time rolls around next year, you'll be far ahead of the game. Getting (and keeping) your tax-related papers organized can help reduce stress, decrease the chance of errors on your return, and perhaps even save you money--all of which can make the process less taxing.
Content copyright © 2008 by Emily Wilska. All rights reserved.
This content was written by Emily Wilska. If you wish to use this content in any manner, you need written permission. Contact Emily Wilska for details.
|
![]()
|
| About BellaOnline | Privacy Policy | Advertising | Become an Editor | Website copyright © 2008
Minerva WebWorks LLC. All rights reserved.
|