It’s Coming – Tax Day

Last weekend my husband sat down to do our taxes.  Yes, it’s that dreaded time of year.  Some of you might have already filed them – I know many people who do it within in the first month or two of the year, eager for the refund.  Then, others put it off, searching through mounds of random papers looking for all the receipts and other relevant information.  From what I see, whether you’re relatively organized or not, it’s not something any of us look forward to.  Despite this, if we can be organized, it can reduce the stress and anxiety associated with this process.

I’ve always been a big proponent of making a specific place to hold all the tax information – a place where you can put it over the course of the year – knowing where to get it when it’s that time to deal with taxes.  This can be a file or a box, it doesn’t matter as long as you put the papers there consistently and avoid putting other papers in that same place.  I’ve made files with upcoming years on them so I don’t even need to think about making another file and every time I get to filing papers, I put them in their correct spot.

There’s one exception to this for me – the medical expenses.  In years past, I’ve had an envelope that lives by other frequently used papers in a desktop file sorter, where I can add to it easily.  Then, before my husband does taxes I pull out all those receipts, divide them into categories, and add them up – giving my husband that grand total on what we spent on doctor visits and prescriptions.  Because of the way I’d set it up, I’d need to add the numbers multiple times, making sure I’d not entered one (or more) of them incorrectly. Toward the end of this year, I decided to make a spreadsheet for medical expenses; columns for the categories and let the computer do my calculations.  I still need to make sure the numbers are entered correctly, but I make a little effort throughout the year, and it’s that much easier when it’s time to do taxes.

Do you have papers that are important for taxes yet also relevant for other activities?  Although not everyone has this to deal with, businesses and those who volunteer extensively are commonly faced with this. It might be “easiest” to make duplicates – then you can have one copy with tax information and the other copy with the other relevant papers.  Even I cringe at that – who really wants MORE papers to deal with?

As with any organizing, the bottom line is being able to find it when you need it and having a system for tracking what you need.  If you file those papers with the relevant papers and forget that at tax time, you’ll be unhappy.  Also, as with most things, there’s multiple ways of dealing with these dual use papers.

When will you use those papers next?  Are they something that you’ll need next in September?  Put them with the relevant papers.  Rather, will use them next for taxes?  Put them with the taxes.  After you’re finished using them for their next purpose, move them to the next place they’ll be used.  Part of how this can work is to make a note for yourself and put in the opposite place from where they’re stored, telling you that these papers are important and then where to look to get them.  Once taxes are completed, papers you’ll refer to for their other purpose can live with that related information.  You’ll only need access to them from a tax standpoint in case you’re audited.

If you’re computer savvy, you can make a file – spreadsheet or document.  If you just need the totals of your different receipts, it can be easy to enter that information and even track it from year to year.  It’d be more concise and immediate to have just that information you need in a computer file.  This does mean that you’d need to be consistent in adding the information into the file.

It’s not too late to decide on and create a system for handling all the tax documents you’ll need for next year.  Think about where you struggle – what papers do you waste time searching for? Why those papers?  Brainstorm ways to cope with how they interfere with your system.  Let it evolve.  My medical receipts lived in an envelope for years before I decided to add them to a spreadsheet throughout the year, making my life and the taxes easier.

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