By Gail from Rochester, NY
By Carol from Wyoming, PA
By Kirsten from Logan, UT
I have also started a sheet of paper for each month, where I list the receipt and what it is for. If I need to locate a receipt for any reason, it is easy to read the sheets rather than dig through the file.
At year's end, I take the folder to our tax accountant and she is thrilled not getting a shoe box full of little scraps of paper! I save money on taxes because I never miss a deduction. I also lower my stress level at tax time, because I am ready to go!
Note: Cheapest and best time to purchase the folder is August when school supplies are plentiful and on sale.
Source: My own attempt to simplify life.
By Eiw from Lancaster, PA
At the end of the month, put the envelope in a box. Mark the box with the appropriate year and you will have all your bills, receipts, and misc. expenditures in one location for your end of the year recapping. Also it makes it easier if you need to find that ONE receipt that you needed in any given month. This system has worked for me for about 15 years.
By Larry from Monroe, GA
By Susie from Hammonton, NJ
I keep this calendar in a zip up 3 ring binder that I pay weekly bills from. In my 3 ring binder I have sections such as bills, receipts, addresses and telephone numbers, bank statements and credit card statements. I separate these with clear separator sheets.
Weekly I staple all checks stubs and receipts that I will need for taxes under the respective months. I make notes about the previous week such as; motel, date, mileage to the motel from job. If the receipts are large then I will make a note on the calendar week the total amount and what the charge was for such as "Motel - $85.00. I then hole punch the receipt that does not fit and put it into a 3 ring binder.
About once a month or so I add up my taxable items such as mileage, motel, medical and write this on the top or a column that I create on the side.
At the end of the year I move all of this stuff to a folding accordion folder and label it with the year. All fits neatly into a file cabinet and the income tax document can store inside.
I can't tell you how many times I have gone back and gotten information out of a previous calendar.
Source: an extension of my 3 ring binder organization tool that I use
Happy Tax Season!
You'll be able to see at a glance which envelope has the amounts you need to include in your tax forms. When you're done with the receipts and prefer to keep all of them in the envelopes, just put a giant rubber band around them and file with your tax papers. (Some people prefer to shred their monthly bills and just keep those receipts that might be needed if they're audited - terrible thought!)
By caseye from Plano, TX
Keep a multi-sectional expanding file on your desk throughout the year. Label each section with areas of papers you may need to file at tax time. Create sections for your flexible spending account, receipts for work deductions, receipts for charitable donations, receipts for miscellaneous deductions, check stubs, etc. At the end of the tax year it's much easier to total these receipts. Then, simply store the entire folder in your filing cabinet.
As a teacher I purchase various deductible items throughout the year. I simply circle the item on the store receipt and place it in the section I have for teaching deductions. At the end of the year, I tally my numbers and write the total on the tab for that section. Taxes don't require me to itemize.
Similarly, I have a section for charitable donations. These are anything but significant. They're the stubs from my yearly fire company donation, my ambulance subscription, a copy of the $10 check I donated to our animal shelter, and a receipt for dropping off two bags of used clothing at the local Good Will. I would never remember these donations come tax time, but with my folder I have a small claim to file.
You don't have to purchase the large desk calendar that could cover a wall. A small monthly calendar that you received for free will work. Each day record any expenses which could be tax deductible. Doctor's appointment? Write the doctor's name and the cost; it's a medical expense which could add up to a deduction. College tuition due? Write it down to tally for educational claims. Shopping trip? Write how much you spent for those scrubs for work. If you're very organized, try to color code your expenses for easy January tallying.
Remember that now is the time to organize next year's taxes. Don't dread the job of preparing your forms; instead keep them organized all year and enjoy the rewards and refunds.
You can avoid headaches at tax time by keeping track of your receipts and other records throughout the year. Good record-keeping will help you remember the various transactions you made during the year, which in turn may make filing your return a less taxing experience.
Records help you document the deductions you've claimed on your return. You'll need this documentation should the IRS select your return for examination. Normally, tax records should be kept for three years, but some documents - such as records relating to a home purchase or sale, stock transactions, IRA and business or rental property - should be kept longer.
In most cases, the IRS does not require you to keep records in any special manner. Generally speaking, however, you should keep any and all documents that may have an impact on your federal tax return:
For more information on what kinds of records to keep, see IRS Publication 552, Recordkeeping for Individuals, which is available on IRS.gov or by calling 800-TAX-FORM (800-829-3676).
Do you have any tips to share? Feel free to post them below.
This may be too late for this year but this is how I handle our taxes year round. I have a folder in the area where I pay bills, open mail, etc. Throughout the year I put dividend statements, Goodwill donation receipts, etc. into the folder. I also keep all paycheck stubs in a separate envelope nearby.
As I receive tax documents in the mail in January, I add them to the folder. Then when we are ready to do our taxes, everything we need is in the folder (including a copy of the kids social security cards). Taxes are still not fun to do but I at least skip the step of pulling everything together. I also make a copy of the current year 1040 form and put it in the folder in case I need some info for the next year. Hope this helps!
What receipts should I keep to use for taxes? For example: food, gas, clothing, etc.
By Sissy30 from Dustbowl, TX
You do need to keep a copy of your tax returns and attached W2's for seven years though and that's to protect yourself in case of an audit. (02/09/2010)