So another year and another April 15th deadline. We all dread tax time because we have to gather lots of paperwork, documentation, receipts, etc. together and try to do our own taxes or give our information to an expert to do them for us. It’s not only time consuming but can also be confusing especially if you’ve had a big life change like a move, marriage, child or divorce. Do yourself a favor for 2014 and start now!
Print out a checklist from your tax prep software or your CPA as a guide for what you will need to have next year.
Go out and buy an accordion file. You can get them anywhere they sell office or school supplies. I recommend the hearty plastic kind with the closure. There should be 8-12 tabs inside; label the tabs with your personal tax items ex.: charitable donations, mortgage, medical, insurance, auto, etc.
Every time you get a receipt that is tax deductible or pertinent to your taxes, put it in the accordion file according to it’s topic. At the end of the year, you will not need to do anything else except total the receipts in each tab. Walla – magic – no more stress about tax time.
If you have lots of paper work, I suggest a quarterly accordion file or totalling your receipts quarterly. Put a date once per quarter on your calendar and spend an hour taking care of this. Again, this will take 4 hours during a year’s time instead of countless hours close to your tax filing deadline.
In march of 2014, you won’t be frantically looking for documents or trying to convince your CPA to take a huge box of jumbled crumpled papers. This will save you time and money!
Happy April 15th!