Have you been waking up in the middle of the night wondering if you’ll be able to find all those tax related documents you know are hidden in shoeboxes, paper bags, nooks and crannies all over the house? Well, here comes tax time, also known as “the three month headache!”
The good news is that if you start now, you still have time to get things ready for this year and be prepared for ’09 at the same time! It’s a two-fer!
The biggest mistake people make in their tax time preparation is procrastinating. As they say, there are two things in this life you can count on; death and taxes, and some of us fear tax time more than death! So think about this, organizing your tax information, even before your 2007 year-end documentation arrives, lets you get a jump on the process and enables you to plan for payments due on the return or, better yet, get an early refund.
There are some easy steps that you can take that will reduce stress during tax season, but you must take them now! Another benefit will be getting your bills, receipts and statements organized so that you can have a simple model to use year after year.
1. First, designate a file drawer or storage/file crate that’s easily accessible (key words) for tax information only. If it’s not easy to file your tax information throughout the year, you won’t do it!
2. Make up tax file categories such as: charitable contributions, mortgage receipts, year-end investment statements, 1099’s, childcare expenses, medical expenses, etc.
3. Every day open your mail over the wastebasket immediately discarding the junk mail and envelopes then file the items that are tax related in the appropriate files as you pay your bills.
4. Separate the tax related cancelled checks and file them appropriately when reconciling your bank statement.
5. Electronic data: If you use a computer tax program, set aside time each week to input your hard copy receipt data and/or organize your electronic statement information. These 30 minutes each week can save you hours during the tax preparation process.
To work with your tax preparer more efficiently, create a file folder for questions or articles relating to taxes. Then when you talk to your accountant you’ll be prepared and focused and can get the answers you need without having to remember what you “read or heard somewhere.”
If you aren’t sure about what papers to keep for tax purposes contact your attorney, financial advisor and/or tax accountant for professional advice now.
Questions for “The Mess Doctor” or if you need professional assistance to get organized contact Barbara Ricketts at MessDoctor@Mac.com or call 661-263-0124.