Are you ready for tax season? Here’s how to get organized

Tax season is right around the corner and that means it is time to find all those important papers. For many people, the only time they think about important papers is when they need them. This can be an overwhelming task if there is no sense of organization. Papers come into our house on a daily basis, and the pile begins. Paper piles on my kitchen counter or table drives me crazy. If it drives you crazy, then read on because we are going to tackle paper organization!

First of all, you need to gather all your paperwork in one place. So take a trip around the house and bring it all together.

Decide what is important to keep. Most experts agree that tax information should be kept for seven years, but check with your accountant to be sure!

Create a system that is simple, easy and convenient. Chances are if you don’t, you are not going to use it; and those piles will take up residence in your home.

ACTION FILE: for those things needing to be handled on a daily/weekly basis. Put it in a convenient place. Categories might include To DO, To PAY, To FILE, To READ. Use a portable file, trays, or baskets.

FILING SYSTEM: These papers are usually kept in a file cabinet that only needs to be accessed periodically. Here is how to set it up.

  1. Put your paper together in categories. Don’t get too specific. Categories should be general. For example, Medical, Auto, Home, School, Finances, Career/Business, Family, etc. Within the major category you may have separate files. For example: Home: Mortgage, Maintenance, Property Taxes, etc. Vital documents should be kept separately. More on that to follow.
  2. By creating your own filing system you might be more invested and better able to understand and remember where you put something because it makes sense to you.
  3. You can use a different color file for the different categories, or use a different color tab to separate categories. I prefer the latter because it is often hard to find more than 4-5 different colored files, and if you have more than that number of categories you have to double up on colors.
  4. File alphabetically and you will know exactly where to find “Travel” information.
  5. If you don’t want to create your own files and feel comfortable with pre-assigned categories here is an example. http://www.freedomfiler.com/ProductsReadyMade.cfm

Preparing for tax season
VITAL RECORDS: This file will hold all your IMPORTANT, hard to replace paperwork.

Birth certificates, Passports, Deeds, Marriage Certificate, Wills, etc.

This should be something portable and easy to grab in an emergency. A good idea might be to have these in a fireproof, portable safe. 

MAIL:

Sort incoming mail immediately! This only takes a few minutes but saves so much time in the long run. Put each item in the appropriate “action” file. If this does not seem realistic, have a basket to put all your mail in until it can be attended to.

Throw out junk mail immediately. Opt out of junk mail!

Depending on your situation, you may want separate trays/baskets for family members (wife, husband or roommates)

TIPS…

Scan receipts and store them on your computer. Free up some file space.

Maintenance: Set aside a day/time each year to go through and tidy up your files.

You could probably say that paperwork is like dirty dishes, everyday you add more to it; and left unattended it becomes a mess! Do yourself a favor, and take control.

For more details and photos on how to create these files on Cheryl’s website, Monkey Do Organizing!  

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