Year Round Organization Saves Time and Money at Tax Time

Many people experience the ?tax season rush? that occurs every April. They've waited until the last minute to look for essential paperwork, and then the actual filling out of the required tax paperwork takes much longer than expected. The best way to remedy this last minute chaos is to set up a year round organization system to prepare for taxes. It sounds like a lot of work, but it will absolutely be worth it the next time tax season rolls around (and you'll spend far less time staying organized throughout the year than you do trying to get it together in the last 24 hours before taxes are due!)

Simple Paperwork Storage and Organization

Keeping track of your paperwork is easy when you have a home set up for everything you have to save throughout the year. If you're someone who tosses mail on the kitchen counter one day, and the computer monitor the next ? you will want to designate one area to keep your paperwork. Once you get into the habit, you'll love the fact that you can go to that paperwork storage area and find anything you're looking for in a matter of seconds.

You can keep it as simple as an accordion file, purchased from the office supply store or Walmart. You could choose a file cabinet with individual files, or a plastic file box and hanging file folders. All of these options are very inexpensive, and will not need to be replaced any time soon as they tend to last forever!

Set up a file folder for each of your categories of paperwork. Some typical examples may be:

* credit card statements
* bank statements
* receipts of anything you spent money on
* paystubs and other income records
* home utility bill statements
* home improvement records

It's also a good idea to keep other important documents in the same area, even if you don't use them during tax time. Things like birth certificates, marriage certificates, user manuals, etc. Having it all in one location simplifies everything.

The Tax Related Paperwork

Starting every January, your mailbox starts receiving those all-important tax documents that you'll use when you prepare your taxes. Having a file folder to save all of this paperwork is ideal. You will receive some or all of the following, and can slide it into the file folder until you're ready to prepare the taxes or bring them to your accountant to prepare:

o W2
o 1099's
o Real estate tax statements
o Investment statements
o Mortgage interest statements
o Receipts from donations

Tax Preparation ? Sometime Well Before April 15th!

Once you've received all of your tax related statements, you can take a few minutes to prepare the paperwork you've been saving all year to file your taxes (or hand to your accountant). If your accountant is used to receiving a box of paperwork in no particular order, he or she is going to be thrilled at your new organization ? and who knows, may even be able to find a few more deductions for you!

From your file cabinet or paperwork storage area, pull out and put into piles things that pertain to:

+ Salary & income
+ Real Estate
+ Investments
+ Child Care
+ Medical
+ Business (if you are self employed, you will have additional categories having to do with your business tax records, as well)

It's a good idea to pull off those perforated edges on paystubs and tax documents, they just get in the way and make it hard to keep the paperwork nice and organized. Paperclip the paperwork together by category and put all into a new file labeled ?Taxes 2008? (or whatever year you're filing for).

Set up an appointment with your accountant early in tax season- end of February or beginning of March. By April 15th, most accountants are tired and have a ton of last minute filers dropping off their paperwork to them. Take advantage of a relaxed accountant early in the season, and give your organized paperwork to the accountant to complete.

If you're filing yourself, you may actually find you don't mind the work now that everything is organized. It becomes a simple data entry job that is almost enjoyable if all the paperwork is together. The sooner you file, the sooner you can get your tax refund if you're owed one!

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