I just spent the last couple of hours going through all of my receipts and statements from 2011 to get ready for filing taxes. I have learned a lot over the past few years, about how to make it easier on myself. In my first few years, I just filed the Easy forms. But then, the hubby went into ministry. Talk about details! As a minister, we could deduct all sorts of things, even toilet paper, because our home was used as a part of the ministry. But then, we also had to take our own taxes out and pay them quarterly. We had to be super organized to not get behind and in big trouble with the IRS. We managed to keep on top of things, though tax season was always a challenge. So, through the years, I've learned how to keep on top of things.
My tricks now? First, I have a plastic shoe box that I keep all of the bills and receipts in throughout the week. That way they're all together when I pay bills and balance the accounts.
I keep a 2 drawer filing cabinet beside where I pay bills. At least once each month, I file away all of the receipts and statements that I need for taxes, and other just-in-case records. My files are pretty specific. I try to match them up to the way the tax forms usually call for them. For example, in my medical file, I have one section for Doctor Visits, one section for Medical Supplies, and one section for Medications. I also have a section for my insurance premiums, since we pay those out of pocket. When I'm in a hurry I slip the papers on top of the cabinet, but at least once a month I file them away. Here's a pic:
I've already emptied the files in the front, the full files are the medical papers that I haven't gotten to yet. You can also see the stack of papers from 2012 that I can't file away until I take care of my 2011 papers.
So, that is constant, year-round maintenance, that just takes a few minutes. In the past, when I just piled up the papers, it took hours and hours to sort them all out. Now, when I do them frequently, it only takes a few minutes at a time.
Next, sometime at the end of January or first of February, I go through all of the files. I organize them chronologically, by category. For example, the first file is the Mortgage. I don't need to total these up, but I make sure I have a statement from the bank that includes my property tax payments. I do want to keep these papers for several years. I staple them together, as long as the staples will go through! Sometimes the stack is so thick, I just have to pray they stay together. I continue to go through each file, organizing, but only totaling up the categories that I can deduct. I keep a pad of paper handy to list out each category.
I end up with a pretty big stack, like this. I put the items that I can't deduct on the bottom, and the deductible stuff on top so I can refer back to it if I need to. I then grab a grocery sack, write the year on it, and slide the stack of papers inside. When I'm done with my tax forms a few days later, I'll put the sack in a box, and take out the first sack from several years ago. That stack of papers can now be shredded because they're out of date (I don't know for sure how many years to keep everything, so I won't post that here!).
The next step for me is to go through my computer program that I use to record my checks and stuff. There are a few tax categories that I don't really have receipts for, but I do have recorded there. I'm able to search for each payee and print out a list that way. Now, once that's done, I'm ready to fill out my tax forms, and send them off. Hopefully, if all goes well, I'll be getting a deposit back from Uncle Sam in a few weeks. Here's hoping!
***** This blog is NOT intended for tax advice. It is simply intended to help the reader be organized to make tax filing go a little smoother. No legal advice is offered here!!! *****
