It’s tax time – Yay!
Well here it is, April – the dreaded tax month! You could pay someone to do it, but why pay someone to do something that you can do yourself, right? So you pull out the Big box of receipts, and empty out the storage area jammed with bank statements and credit card bills, and prepare to play accountant for however long this is going to take.
The truth is, according to most experts, that you should be preparing for tax season throughout the entire year.
What the experts say
Part of preparing for tax season throughout the year is to develop a good filing system. Get yourself a small file cabinet, and some file folders. Some categories that you will want to incorporate will be…
- Credit card receipts
- Bank statements
- Medical and dental
- Mortgage / Property taxes
- Household utilities
- 401k / IRA statements
The new organized you
Now when you need to find something specific through the course of the year, you will know where to look . There will no doubt be some items that you will no longer need once your taxes are completed. Experts recommend that you shred these items, as they may contain personal information that you wouldn’t want to fall into the hands of the wrong person. Some documents you will need to save. The rule of thumb for these items is 5 years. If you don’t have room at home, you may want to consider a small self storage space. Be sure to label all of your file boxes with the tax year, so that you will know which boxes to empty out as they reach the five-year threshold.
Okay, so now you’ve done all these things, and you are finally organized! This brings us to the good news, and the bad news – and they are both the same….you are now organized and prepared for many happy years of home tax preparation. Happy accounting!!
By Jerry Brown