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Organizing for Taxes

Posted on 18 July 2010

Organizing for Taxes

Having a Tax System in place makes April 15th a lot easier. I know it is also around Pesach time so believe me, if you set this up ahead of time, making Pesach and doing your taxes won’t feel like a curse!

A few important things:

  • Home
  • Personal
  • Money and Insurance
  • Taxes

1. If you are working with an accountant, ask them NOW what information they will need from you and write that down either on paper and save it in your tax file, or store it onto your computer. This way you won’t be asking them the same questions every year and you can improve your data collecting as you go along instead of procrastinating until the last minute!

2. Keep a log in your car of your mileage OR, if you can’t do that everyday, print out the directions you printed out anyway and save them in your tax file (which I’ll tell you how to create in a moment) so at the end of the year, you have all of your long distance trips with the most mileage recorded.

3. Okay, here’s the system at a glance. All year round, you should have a file system that works for you. There are a few basic ones I recommend, but honestly, you can do it yourself.
If there are just a couple of people and your family, and you are basically efficient when it comes to organizing, you can keep a 2 drawer desk file cabinet or even just a couple of filing baskets on hand with alphabetical categories.

If you have a lot going on, like a big family, and you just have not been able to keep filing system in the past, most likely you are a creative person and for you I really don’t recommend typical organizing systems. Click here if you think you are a more creative personality, where NO OTHER organizing system has worked for you in the past. There are plenty of alternatives that are more colorful and fun for you, and for right now, I’m talking about keep a traditional, typical file system and the differences between a small one and a larger one. We’ll come back to the creative person.

If you need a larger filing system, use four drawers and don’t attempt to keep an alphabetical one! You need to create Categories and then fit subjects under a category.

For instance, say you live in a very large home, and you don’t have one lawn service coming to mow your grass. You have a landscaper, a lawn mower service, a pest control service, and a Organic Natural Lawn Service for seeding the grass. What would happen if you put one alphabetical file folder under the name “Advanced LandScaping”. If you were looking to one day call your landscape architect, do you think you’d remember all of the names of the companies of the different lawn companies you use? No!!!

So your Category would be Home- Lawn and then you could have various papers or sub-categories under the Major Category.

Get it? Create about 4 Large Categories, and then Sub categories.

Here are some that I like to see:

Let’s go right into the Organizing for Taxes Category.

We’ve determined that you need some sort of file for Taxes so you can easily slip receipts, paystubs, and mileage in all year round. Whether it is a big category with lots of subcategories, or if it is just one Large Manila File and everything gets put in there.

Whatever you decide to do, when you start receiving statements such as: W9s, 1099s, take them out and put them into an accordion file. You can use a label maker, or just handwrite the categories on the accordion file- Medical, Mortgage, Insurance, Income Stubs, Whatever. Use it year after year when your accountant gives it back to you or after you finish doing your taxes.

I hope these tips make tax season a lot easier!

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