I found the carpet in my office today.
It’s that oatmeal color favored by builders and people who are sprucing up the house before they put it on the market. Neutral shades, you know, tend to appeal to more potential buyers.
Unfortunately, I also found a couple of gray, smudgy spots on the carpet that I didn’t remember seeing before. Since about mid-January, the spots apparently were covered with tax material that took up about half my office’s floorspace.
Now in my defense, a lot of that stuff was tax books, IRS publications, various magazine and newspapers, online tax documents I printed out for easy reference — all material I used when I put on my tax journalist hat.
But around mid-March, my personal tax material filled most of the other half of the room.
I left a pathway from the door to the desk and the desk to the closet where I have my files. I use those files, but when it comes time to start entering the information in them onto my tax return, I like to spread them out in nice little stacks so I can see exactly what I have and what I need.
There’s my Schedule A, itemized deductions, pile. Then the Schedule B stack of investment income. And this tax year, my first where I spent more time working for myself than as an employee, the Schedule C collection of self-employment income and expenses got special attention.
You get the picture. And yes, it is a somewhat messy picture. But it’s not like all these items are tossed willy-nilly on my office floor all year round. They find their way onto the floor for only about a month. The other 11, they are neatly filed away in the aforementioned closet.
This file-to-floor approach works for me. Items are easy to get to, laying there in the open so I can wheel my chair over and reach into the stack for the 1099 or W-2 or business receipt that I need to enter on my 1040. The stacks are neat and accessible because most of the year the data is pre-sorted in files, just waiting for the April deadline to near.
What about you? Did you have to spend days digging out tax documents and deduction
substantiation before you could even start on your return? If so, make a vow
now, today, not to go through that again in 2007.
Start with the basics: Organize your tax material.
A shoebox is better than nothing, but you’ll eventually have to sort
through it, so why not start sorting from the get go. The next easiest,
and cheap, option is a simple accordion folder. A small one is fine if
your taxes are relatively simple. You can just throw your documents in there.
But if you have, or expect, lots of
deductions, then pick up one of the fat ones. And look for a folder that
has tabs you can label to keep your receipts and other tax data in
order.
The next step on the organization stairway is a filing cabinet. If you
already have one, designate a drawer or a portion of one to your taxes.
If you don’t have one, you can pick up an inexpensive filing cabinet at
any Target or similar store.
You also can get high-tech help. Use a computer program to help you
track your expenses, designating computer files for charitable
deductions, medical expenses, business expenditures, home-related tax
costs (e.g., mortgage interest for annual filing; improvement costs
that you might find useful in reducing any possible capital gain when
you eventually sell your home), and the like. You can print out concise reports
that will make next year’s tax filing much easier.
Of course, in most of these cases, you’ll need to actually keep the
receipts, too. The IRS, when it comes asking questions, likes to look
at originals. But you still can track them via computer if you have a
scanner.
Simply scan the items, several to a page, in and voila!
Then just stick the box of original receipts on your closet’s top shelf. Since you’re following all the tax
rules and getting everything in to the IRS as required, you’re not
going to have to pull it down for a tax examiner.
If with all the tax data now occupying your C drive, you find your hard drive is a bit over-stuffer, simply dump all your tax info onto a handy flash drive.
You need a tax filing system even if you use an accountant or other tax
preparer. Your organization will save him or her time, meaning your tax pro can
better concentrate on how to maximize to your advantage all the
material you delivered in such an orderly fashion.
The key is to set up an organization system and then use it! It
doesn’t matter how fancy a filing system is if you never put the
documents in the folders. Get in the habit now and it will save you hours
next filing season.
So today, with 2005 taxes now in Uncle Sam’s hands, it was time for me to put this stuff on my floor back in its properly filed place. I’ll look at exactly what to do with all these old tax documents in a coming post.
Now I have to figure out what caused those spots on my carpet. That’s the downside of neutral colors. They tend to show dirt a bit more.
I swear I don’t remember them being there before tax season started. I just hope that Resolve will get them out.
