April 15th is just around the corner!

Uh Oh…April 15th is just around the corner!

April 15th, the most dreaded day of the year for many of us non-accountant disorganized types, is creeping up and we are nowhere ready to file our 2007 taxes. “I should have been more organized during the year; then I wouldn’t be so stressed out for tax day,” utters my client who is now just putting ’07 tax documents together. Don’t stress out; it is not too late to get organized.
Now is the perfect time to put a good system in place for storing your tax documents. Use these simple fool-proof tips to bring some order to the tax preparation process and when summer rolls around take your refund and do something enjoyable as a reward for not waiting until the last minute.

1. The Filing System:
An intuitive, easy-to-use filing system is a necessity if you want to eliminate the serious headaches from this somewhat grueling task. All that is necessary is a working filing cabinet with some well labeled file folders. If you are in the anti-filing school, I suggest using a large accordion file just as long as you have an easy to access home for it. Once you decide on the best system for you, it is time to divide and categorize your papers. If you use an accountant to prepare your taxes just separating your income items from deductions may be enough, but be sure to ask your tax professional how they want your documents organized so they don’t spend needless time which will result in an extra tax preparation expense on your part.. If you are doing your own taxes, I highly recommended using tax software such as Turbo Tax. Turbo Tax stores past tax returns and you may even get your refund faster.

2. Sub Categories:
Sub categories may be needed, if for example, you itemize numerous expenses. An accordion file is only effective if you have fewer than 12 or 13 sub categories. Your file folder or accordion file may look like this:

Expenses:

Property Taxes
State and local income taxes
Charitable Contributions
Mortgage Interest
Medical & Dental expenses
Childcare

If you don’t need to itemize you will save some time, but most importantly your system only has to allow enough room for your tax forms, proof of income and various tax booklets which can be neatly organized in one drawer of a file cabinet.

3. Receipts, receipts & more receipts:
Again, if you itemize business/personal expenses or donate to charity, you must hold onto all receipts and supporting paperwork. It is much too large of a chore to throw a year’s worth of receipts in a brown paper bag and sort through them right before the tax deadline. Throughout the year a small accordion file is the perfect receptacle to house your receipts because of the dividers. If the dividers are pre-labeled in a way that doesn’t fit your needs, use a label maker to make your own labels and place those over the pre-made ones; remember nothing is set in stone.

4. Archive:
Before you know it, it will be time to file ’08 taxes so go 1 step ahead and get your ’07 paperwork out of your active file drawers. Empty the system you created this year and put all the documents pertaining to your 2007 taxes in one place including your tax return. It can be as easy as placing all documents in a large envelope so long as it is in a safe location and out of the way from your active files. Remember to keep your tax returns forever.

Implementing a system that will help you keep and maintain your tax-related papers in an organized fashion will save you a lot of time and trouble when it comes time to filing your taxes or if you need to look up information several years down the road on a past tax return.

Call Jessica Brodsky
File It Under Complete

(312) 618-9000