Organizing Your Taxes a Little at a Time Reduces Stress

     
Whether you do your own taxes or not, you must usually collect data in various categories (medical, charitable contributions, business expenses, etc.)  before that can happen.

To make it less stressful, pull together one category at a time, spread over several days. Before long, you'll have each category neatly organized and itemized, ready for your accountant or when you do your own taxes.

Put on some of your favorite music or watch a movie (if you are able to multitask in this way) to make it more bearable.

By getting each category completed ahead of time, preparing your taxes won't be such an overwhelming task!

More on taxes:
Fall - A Great Time to Organize Your Finances
Managing Paper, Part 1
Get Organized Month - 13 Tips on Saving Money by Being Organized

Following My Own Organizing Advice - Getting My House in Order

  
Yesterday, my husband and I spent the holiday organizing our tax information. It was not too taxing (haha), as my husband had kept up with the filing of receipts. Aren’t I blessed?
 
It was a logical time to sort through our fire-proof safe and condense our important papers, too, as we usually keep our current year’s tax info in the safe. We also have a file for each of us which holds our birth certificates, degrees, Social Security cards, passports, and other information we would not want to lose.

We have a file of important documents for each of our children and for each set of parents. Another file holds our will and marriage license. And I have a file for important documents relating to my business – trademarks, licenses, certificates, etc.

We also copied pertinent credit cards, insurance cards, driver’s licenses, and other cards in our wallets. We each lined our cards on our copier and copied front and back, and placed those copies in each of our files. So now, if our wallets get lost or stolen, we have a copy of each card. A good time to declutter that wallet, too, and get rid of outdated cards.

Even though we had organized our important documents before, we found some items that could be removed, and some that had been removed, used, and needed to be returned. It was helpful just to look over what we had and know where it was.

So if we need to evacuate quickly, we can scoop up those files and know we have the most important information in our hands. We’ve also given our children the code to our safe in the event they need to get to our important data.

Next on my list: putting my password list in my file.

Can your family members find your important information easily? Would you be able to evacuate quickly if necessary? If not, take a little time to consolidate your important documents. It gives such peace of mind!

More on important documents:
Getting Your Affairs in Order
National Preparedness Month – Emergency Kit #8 – Emergency Documents
Get Your House in Order – A Great Wintertime Project

Clever Event - Shredding, Tax Advice and Food Bank Donations

        
Someone in Oro Valley, Arizona had a great idea: combining shredding with tax advice and providing an opportunity to donate to the local food bank. Here's what they're doing:   

"Get rid of old documents safely at a free community shredding event Saturday, Nov. 10.  It will be held from 9 a.m. until 1 p.m. at Oro Valley Marketplace, at Oracle Road and Tangerine.

Tax professionals from the Southern Arizona Chapter of Enrolled Agents (SACEA) will provide information on how long to keep tax records, as well as year-end tax planning tips and how to save money with Arizona tax credits.

Shredding will be done by Shred-It Arizona for free, but a suggested minimum donation of $5 per box and/or three cans of food to the Marana Community Food Bank is requested. The Food Bank will have representatives at the shedding event to receive donations of money and canned goods.  Cash donations may qualify for a “dollar-for-dollar” tax credit."

Why not organize such an event in your community?

More on shredding and taxes:

Some of My Favorite Organizing Products - My Heavy Duty Shredder

National Simplify Your Life Week - 5 Simple Tips

Color-Coded Taxes

Fall - A Great Time to Organize Your Finances

     
Here's an excerpt from an article by Erin Baehr, a financial planner on how to organize your finances. Be inspired!

"There's something energizing and motivating about this time of year.

The dog days of summer are coming to an end and there's a chill of fall in the air in the mornings. Even without any kids in school anymore, seeing all those school supplies on sale gets me in the mood to organize.

It feels good to clean out and get a fresh start for the fall. So in the spirit of 'back to school,' here are some tips to get financially organized.

Everything has a place

Brainstorm to come up with a system that will work for you and your life. It makes no sense to set aside a place in a corner of the house with a beautiful filing system if you know you really won't get up there to use it. I don't know how many times I've set up the 'perfect' system, only to find in the chaos of life that it was impractical.

If papers seem to always get dumped in one place in the kitchen, go with that, and set up your system there, at least as a temporary stop in the filing chain. It has to be workable for everyone or it won't happen. Use a dedicated color coded pocket folder for each child to deposit his school papers and keep track of papers that need to be returned, for instance, and others for family business, including mail to sort through, bills to pay, and things to be filed.

On a regular basis, set aside time to transfer to your 'real' files. I love the 'Everyday' file sorters that have tabs for each month, and also tabs for each day of the current month in the front. It's a great way to tuck away something you'll need in a few months and not forget about it. Workflowy.com is a nice (and free) online to-do list tracker, too.

Get the right stuff

School supplies aren't just for kids. Having the right tools for the right job makes a difference and now's the perfect time to shop the sales and scoop up the deals. Look for the bargains on folders, binders, pens, notebooks, and don't forget the box of crayons (coloring is a stress reliever) yo0u can buy discounted to a penny in some office stores.

Be sure to have a healthy supply of hanging file folders on hand. If you don't have a filing cabinet, look for a used one on Craigslist, garage sales, or the local Facebook yard sale pages. I've found several sturdy, locking file cabinets at bargain prices that way.

What to keep, what to purge

Again, you'll want to set up your files in a way that makes sense to you. Simple is better. I like to have a file for the current year, and then thin out and transfer to the permanent file at the end of the year. Some topics to have in your current files include: bank statements, credit card statements, medical bills and insurance statements, employment benefit information, pay stubs and income statements, investment statements, retirement account statements, auto receipts, home improvement receipts, insurance (home, auto, life), utilities, mortgage statements, tax documents (including the relevant credit card statements, canceled checks, tax bills, or receipts for things that you will need for your taxes).

At the end of the year transfer to permanent files those that will continue to be relevant, such as bank statements with canceled checks to prove a purchase or tax deduction, any non-retirement investment statements that show purchases, sale, or reinvestments (to prove your basis later), major home improvement or repair receipts, auto repair receipts for cars you still have, auto and home insurance declaration pages for one year prior, life insurance papers and medical bills relevant to a current illness, insurance claim, tax deduction or flexible spending reimbursement.

Pay stubs can be destroyed after comparing to your W2 at year end, and the same goes for mortgage statements — once they're matched up to your 1099 in January you can destroy them. You can destroy other records that you don't care to keep for tracking purposes, like utility bills to compare year to year or employment benefit booklets.

Your permanent files should include: product manuals, education and employment records, prior year tax returns, medical histories, warranties and related purchase receipts, safe deposit box inventory list, password list, loan documents, pension and retirement benefit estimates, Social Security statements (note: Social Security no longer mails statements; you can get yours online at www.ssa.gov).

Important documents such as password lists, car titles, birth certificates, and social security cards should be kept locked up in a fireproof, waterproof box or in your safety deposit box. Wills, advanced medical directives and powers of attorney should be kept in the fireproof safe also, with copies given to the appropriate, trusted parties.

A common question is how long to keep tax records. The IRS can audit your return for up to three years, so you'll want to keep them at least that long. However, if you grossly underreport your income (by at least 25 percent of what is on your tax return), they can go back six years; for fraud or not filing a return, they can go back indefinitely.

Records for worthless securities should be kept for seven years, and you should keep records for amended returns for three years from the date you originally filed or two years from the time you paid any additional tax, whichever is later. It's important to keep your documentation organized from year to year; it's easier to file carefully now then recreate records in the event you are questioned about a deduction.

Develop a master list of where each type of document is kept, and a snapshot of your assets and liabilities. Storing your files electronically is okay, too, as long as you have a secure place to keep them, where they are protected from data loss and theft. Communication with others on your financial team, like your spouse or executor, is important as well. The more organized you are the easier it will be to help you in the hopefully unlikely event of your incapacitation or death.

Shred it, don't forget it

To protect your identity, be sure to shred your old documents rather than tossing in the trash, either with a shredder or a shredding service. ...

Keep it up

Even with a system that works for you, you'll have times that things get sloppy. Life just happens that way. So take advantage of the energy that the crisp fall air brings and do some pruning. You'll be glad you did."

More on organizing finances:

How Quickly Could You Evacuate?

Managing Paper

Organizing Tax Receipts

Organizing for Taxes - Deductibles

         
 We have been on a roller coaster ride this last week. We got a call saying my husband's mom was at death's door. We scurried around and left the next day. Over the four days we were with my mother-in-law, she rallied. So we drove home in six hours of rain, sleet, snow and fog. The next day we got a call saying death was likely. My husband packed up again and called the doctor to find she had improved! It's so difficult caring from a distance! On the bright side, I worked some on my taxes during the trip, the subject of our post today ...

If you compute your deductions on your income taxes, Salvation Army's Value Guide can help you determine amounts to deduct for those physical items you've donated to non-profits. It provides a range from high to low for clothing, dry goods, furniture and other items.

In addition, TurboTax and H&R Block tax programs have built-ins that help you determine what may or may not be deductible on your taxes. 

FYI: even though I've heard experts say that you need to keep your tax returns for only 5-7 years, I'm hearing more and more that you should keep them indefinitely.

More on taxes:

Taxes - Knowing Which Papers to Keep/Toss

Organizing for Tax Season

Organizing Tax Receipts

Organizing for Tax Season

            
Happy Valentine's Day! Last night I made heart-shaped pumpkin muffins for the girls for breakfast this morning. I'm trying to figure out how to carry the theme through dinner. In the meantime, here's our post for today ...

It's time to think about taxes again! I'm going to try something new this year - expandable files just for my taxes. I found these DiVoga files at Office Max for $9.99 - one for this year's taxes and one for next year.

They are 13-pocket files with snap fronts with two snap options: the one shown for fewer documents and another snap higher up if you have more documents making the file thicker. I got them in different colors so I could distinguish between tax years. I couldn't find this exact file online, so I don't have a link for you. 

I did find similar ones from Smead. The All-in-One Tax Organizer also has 13 pockets with an elastic closure. It has pre-printed and blank labels for your convenience.  





If your taxes aren't very complicated, you could use Smead's 6-Pocket Tax Organizer. 

For that matter, you could use any expandable file. I saw several that were different colors and textures for around $12-18.

I'm going to set my open file near where I sort our mail, so I can just drop various papers into their slots without having to open a file folder or file cabinet! I'll do the same with receipts. When tax time comes, everything will already be categorized. 

How do you organize your tax documents?


More on taxes:

Taxes - Knowing Which Papers to Keep/Toss

Saving Money by Being Organized

Three Steps to Organizing Your Office

Color-Coded Taxes

Snow day today and the roads are completely clear! Calling for 6-15 inches now! Of course, three of the four girls were up by the time the closing was announced. Today is one of our girls' birthday and she requested oatmeal pancakes for breakfast. So everyone ate pancakes and went back to bed except birthday girl and me. :) More on taxes ...


We've started color-coding our taxes. We choose a color for the year and use that color for all tax files. Instead of seeing a sea of manila file folders when looking for last year's tax info, it's easy to locate all pertinent files because they're all yellow, for example. So pleasant on the eyes! I'll take anything that makes taxes more pleasant. :)


More on taxes:
Taxes - Knowing Which Papers to Keep/TossOrganizing
Tax Receipts

Getting Your Affairs in Order

Organizing Tax Receipts

Getting your documentation ready for taxes is stressful enough without wading through mounds of receipts! If you are one who just stuffs receipts throughout the year, here's a hint to make life easier next year.

As you're sorting your receipts for this year's taxes, label two sets of file folders - one for this year and one for next year. By sorting this year's receipts into appropriate categories, you'll know which categories you'll most likely need for next year.

Drop next year's file folders into a hanging file. Now, instead of stuffing receipts into one location, take an extra moment to drop them into the appropriate file. Not much work now, but it saves hours of work later.

And if you file your receipts starting with January in the front, adding later receipts in the back, you will already have them in chronological order, too!

Even if you've already started stuffing this year's receipts, take some time and organize them into files. You'll thank yourself next year when tax time rolls around!


More on taxes:
Taxes - Knowing Which Papers to Keep/Toss
Taxes - a little at a time
Can Your Loved Ones Find Your Important Documents?

Taxes - Knowing Which Papers to Keep/Toss

As end-of-the-year statements start arriving, it's always confusing to know what to keep and how long to keep them. Here's what Mary Kay Foss and John Levy, California CPAs, recommend:

"ATM, Debit and Credit Card receipts - Check against your monthly statements, then, unless needed for a tax write-off, shred after one month.

Monthly credit card and banking statements - Save records of tax-deductible items for seven years; shred the rest when the new statement arrives. Exception: proof of major purchases. Retain for at least four years (most states' statute of limitations for disputing a transaction).

Paid bills - Keep any related to a home office tax deduction for seven years, those from home improvement until you sell. Shred everything else when the next bill arrives.

Pay stubs - Shred when your W-2 arrives (once a year).

Car or real estate paperwork - Hold records from buying any asset for seven years after it's sold.

IRS Documents - Retain annual returns forever. Discard supporting papers like W-2 forms and receipts after seven years." (Source: Family Circle magazine, p. 152, Nov. 1, 2009)


More on taxes:
Taxes - a little at a time
Get Organized Month - Organize Your Receits
National Preparedness Month - Emergency Kit #8 - Emergency Documents

National Association of Professional Organizers' Best Product in Technology

The National Association of Professional Organizers awarded NeatDesk their “Best Product – Technology” at their annual conference this year. I thought you might like to know about it. I have not tried it, but it looks pretty cool. It costs $499, but they are offering $50 off right now. Here's what NeatDesk's website says about it:

Paper goes in. Information comes out.

NeatDesk is a high-speed desktop scanner and digital filing system that scans receipts, business cards and documents all in one batch. It includes NeatWorksTM software that identifies and extracts the important information and automatically organizes it for you.

With NeatDesk, you get a digital filing cabinet that intelligently organizes and secures all your important information.

Transform your workspace into a space that works. At work or at home, NeatDesk declutters your workspace, providing a central “inbox” for all your papers—ready to scan when you are.

All-in-one scanning. Our removable input tray can scan both sides of up to 10 receipts, 10 business cards, and 10 documents at a time—or even a single, 50-page document.

---

Key Features:

Intelligent Text Recognition

NeatWorks software uses OCR and patented parsing technology to identify and capture key information from scanned documents. On receipts, it looks for the date, vendor, amount and sales tax. On business cards, it captures all of the contact information: name, company, title, address, phone, email, website and fax. And on documents, the software captures all of the printed text and gives it to you in searchable PDF format. You can also perform keyword searches on any scanned item to find what you need quickly and easily.

Scan in receipts to:

• Save digital copies of receipts and records of vendors, dates and totals
• Create expense reports and manage business and personal expenses
• Keep track of expenses for tax time (records accepted by the IRS)
• Export data to Excel®, Quicken®, QuickBooks®, TurboTax®

Scan in business cards to:

• Keep digital images of cards and contact information
• Capture name, address company, title, etc.
• Create your own searchable contact database
• Export data to Outlook and more

Scan in documents to:

• Create searchable PDF files
• Edit text using copy/paste
• Organize and store in your digital filing cabinet

HOW IT WORKS:

What do you think? Subscribers click here to comment on the original blog.

Don't Do Your Taxes ... Yet

According to a February 12, 2009 MarketWatch article by Eva Rosenberg, your investment 1099-Bs may still be in the mail. With all the upheaval in the investment industry, the government has given investment firms a Feburay 17 deadline to mail out correct 1099-B forms.

Even if you've received 1099-Bs already, the article recommends waiting to make sure you don't receive a corrected 1099-B. It's no fun to have to amend your taxes!

I hadn't heard this information and figured if I had not heard it, maybe you hadn't either!

Taxes - What Documents To Keep and How Long?

I've got the second load of sheets and towels in, as this house of girls goes home today and another house comes on Friday. It has been a busy week - a birthday with all the trimmings, appointments/work, a hair cut, homework, a few tears, good talks, a play, a movie, baking cookies - life with teenagers!

But taxes are a-comin' aren't they?


Taxes - What Documents To Keep and How Long?

Jerrie Dean at eHow offers the following list to clarify what you should keep and how long:

"1. Pay stubs, utility bills, credit card, check statements, mortgage receipts, canceled checks and receipts for minor cash purchases do not need to be saved unless they are needed to verify tax and warranty claims (see #2). Otherwise you can shred them after one year.

2. Tax returns, W2's and 1099 forms, receipts, canceled checks, statements, self-employment expense records, and brokerage statements that you keep with your tax returns can be shredded after three years, but it is safer to keep them for seven years as if you under report your income by more than 25%, the IRS will go back that far.

3. ATM and debit card receipts and credit card receipts can be shredded after you get your monthly statement (and reconcile them with the statement - my comment).

"4. Quarterly and monthly financial statements and Social Security statements can be shredded after you get your annual statements (and reconcile them with the statement - my comment).

5. Keep your insurance policy, passport, will and power of attorney's until you get a new one.

6. Keep warranties and service contracts and receipts for those items until the guarantee expires or you no longer have the item.

7. Keep your deeds, stocks and bonds until you sell.

8. Home improvdement records, your 401k, IRA or pension records should be kept for three years after you sell or close the account.

9. Your birth, adoption, school diplomas and transcripts, Social Security card, military records, marriage certificates should be kept for ever and in a fireproof safe, too."

Even though taxes aren't fun, this list gives us the confidence to get rid of excess paper yet be prepared for the ultimate Fear Factor: an audit!

Getting Organized for Taxes - Are Scanned Receipts OK?

We've spent the last couple of days getting ready for our first house of girls this month who arrive this afternoon after school. In the meantime we'll take a CPR class today, required every year. Now on to our blog:

You may have heard of or own Neat Receipts, a device that scans your receipts onto your computer. I've heard many laud this device because it reduces the paper clutter. However, I recently read an IRS report that states that the IRS requires original receipts if they audit you. Just thought you'd like to know.

The report also suggested that you photocopy receipts printed on the kind of paper that fades over time. Staple the copy and original together, and keep with your records.

I guess this is one area in which decluttering is not in our best interest!

Redeeming Your Travel Time

Sorry I didn't get to blog yesterday. Our DSL modem decided to die and I got the flu! I'll write this blog and then go back to bed. :-)

If you have some trips coming up, use the time in the car or plane to catch up on some projects, reading, or such. We travelled a bit over the Thanksgiving weekend, so I took along our receipts for the year, and categorized them for tax purposes.

I know, I know – I’m a professional organizer. I should be filing all the time, right? I always tell my clients that the best filing system is the best filing system for them. I HATE to file. So I use baskets for the few categories I use consistently (banking, receipts, bills, my business). I would much rather take a few hours and categorize once a year than file all the time.

I labeled 5 x 7 envelopes and stood them up in a small box, which allowed me to slip receipts into them. I’ll later transfer them to a larger crate with hanging files, which was too unwieldy to use in the car. I use the crate while I’m in the process of doing my taxes. Then it goes in the file cabinet, with a copy in the safe.

If life has been hectic, use your travel time to replenish yourself – read a magazine, or that book you’ve been dying to start, or play games, or sleep! If you’re sleep deprived, sleep is a good investment. My husband and I often use travel time to talk over ideas.

Keep a balance - know when to work and when to relax.

What do you do to occupy yourself while travelling?

Decluttering and Taxes - Radio Interview

On Friday, February 29 8:10-8:20 Eastern I'll be doing another radio interview. This time it's with WMAC 940 am in Macon, Georgia. We'll be talking about decluttering and taxes. If you'd like to listen in, you can go to their website at www.wmac-am.com and click the live stream icon on the right side of the page.

While we're on the subject, if your receipts are in more than one place, now is a good time to go through your house and collect receipts or paperwork you need in order to do your taxes. Look over my other blogs on taxes about organizing receipts, etc.

Even if it is overwhelming, spend 15-20 minutes at a time, and you'll make surprising progress!!

Saving Money by Being Organized

Did you know that you can actually save money by being organized? Never thought about it before? Here's how:


- A U.S. News & World Report study found that that Americans spend roughly a year of their lives looking for lost items at home or at work - that's a lot of wasted time which equals wasted money.

- When you're organized, you know what you have and you don't buy things you already have.


- When you're organized, you are aware of the food in your fridge and you use it up before it spoils.


- When you're organized, you plan errands, saving both gas money and your time, which is also worth money.


- When you're organized, you are able to take advantage of opportunities that come your way that either save money or make money for you.


- When you're organized, you know where your bills are, and you pay them on time, saving late fees or reconnection charges.


- When you're organized you service your car and other appliances, saving costly repair bills or replacement costs.

- When you're organized, you have necessities on hand, preventing last minute trips - costing both time and money (especially if you go to the convenience store).


- When you're organized, you plan meals, saving costly take-out meals or eating out. For the price of four combo meals at a fast-food restaurant, you could be eating steak or salmon, neither of which are time-consuming to prepare!

- When you're organized, you pack a lunch instead of eating out. Spending only $5 a day for 20 work days equals $100.

- When you're organized, you keep track of your bank account, saving expensive overdrawn fees.

- When you're organized, you write down business mileage and charitable contributions, saving money on taxes.

Want to get started? Start small. Determine the area that is costing you the most money. Organize that area and move on to another area. Reward youself when you make progress! Give yourself credit for small steps forward!!

Results of our January Poll

The results of our January poll are as follows:

Which room in your house do you struggle the most to keep organized?

- Home office - 32%
- Kitchen - 26 %
- Bedroom - 20%
- Extra room - 13%
- Living room - 11%
- Child's room and Family room tied at 5% each.

I've decided to make our February contest an extension of our poll - organizing ideas for your office. Contest details are to the right.


We have some new sales for the month of February, if you're interested:

- Organizing Your Office/Time Managment - we have 5 packages depending on the time managment book you choose. Just in time for taxes!

- Radio Program Package (realating to the interview I did with Allison Carter on her Organizing Playground radio program) - Planning Meals: Three Steps to Planning Dinner plus Hassle Free Dinners CD.

To check these sales out, go to our website: www.1-2-3GetOrganized.com.

Get Organized Month - Organize Your Receits

It's a good time to start getting your receits in order for taxes and closing out 2007. If you have been filing your receits in separate categories, you are way ahead of the game!!

If not, and your receits from 2007 are in a box, a drawer, a file or a paper bag, it's time to take them out and look at them. Anything that doesn't relate to taxes, a product receit you might need in the future, repair/improvements to your house, or other categories you deem important can be discarded once it has cleared your credit card statement successfully. Make sure you shred anything with sensitive information on it - credit card numbers, social security numbers, account numbers, pin numbers, banking info, etc.

Separate your important receits into categories that relate to your life. Total categories that relate to taxes and list your totals - on a spreadsheet, on your computer, on a piece of paper or in another way you prefer. This may take you a while to complete this task, but if you start now you won't be stressed when tax time comes around.

If you haven't filed your receits for this year, create a few hanging files, file folders, or use an expandable file to store your receits for 2008. Use a software program to track your expenses, if that is something you feel comfortable doing.

Good job done!!

Donating Business Clothing for Job Interviews

Yesterday my husband and I swapped out our clothes from summer to winter. As we both have lost some weight, we have quite a few clothes to donate. I recently watched a video about a women's shelter in our area, and I am very motivated to donate toward helping these women get back on their feet. Many of these women have had successful jobs, been downsized (or had other devastating circumstances), and end up at the shelter.

Access, the name of our shelter (www.access-shelter.org), has a two-year program for a small number of women to help them get out of debt, get education, find a job, etc. Having clothing to wear to work or job interviews gives them a leg up. As you swap out your clothes and evalute them, consider donating business attire you no longer wear to a local shelter or www.DressforSuccess.org or www.CareerGear.org (for men).

Don't forget to calculate your tax deduction. The Salvation Army has a valuation guide to help you determine the value of the clothing you donate. They give a high estimate and a low estimate, and you can determine where your clothing falls within those guidelines. The amount is based on what your clothing would sell for at a consignmen shop. http://www.salvationarmyusa.org/usn/www_usn.nsf/vw-search/85256DDC007274DF80256B80003D22FC?opendocument

Taxes - a little at a time

If you have segments of your taxes where you need to accumulate data (medical expenses, business, etc.), set aside some time before you actually do your taxes to complete that aspect of your taxes. By getting that section done ahead of time, preparing your taxes won't be such an overwhelming task. Yesterday, while our foster girls were getting up at various times of the morning, I took a little time to gather and tally my business expenses and income. When we get ready to do our taxes, that part will already be done, and hopefully the process will go quickly and smoothly.