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Get Ready for Next Year's Taxes

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With the tax season already behind us (almost!), here are a few suggestions I have to make next year's preparations a bit easier.

  1. Get a large shoe box and place in a prominent location (bedroom closet works for me.) Place EVERY bank statement, reciepts from deductible items (such as medications, day care, etc.) and other items you'll need at tax time (use envelopes to assist in sorting if necessary.)
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  3. Develop a HABIT of placing the items in the box at the end of the day (I put them in my laundry basket so they actually GO up to the bedroom for storage periodically.)
  4. Begin saving for your IRA NOW! Set aside a small amount from each paycheck (I save 10% of my pay and it is the second check I write after my tithe to my church) IRA contributions for 2006 are $4000 (or $77 per week) if you are under 50 and $5000 ( or $96 per week)if you are over 50. When you have accumulated the total amount, get it deposited into your IRA. If you aren't able to save the full amount by April 15th, deposit what you have! After all, you aren't getting any younger!

Happy Tax Season!

By Diana from Prospect, KY

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April 2, 20120 found this helpful

I have a better idea for preparing for each year's taxes. Use letter size envelopes and every time you have a receipt, write on it what it is, and then place in the appropriate month. You should have 12 months with all the receipts in date order too.

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April 2, 20120 found this helpful

Better yet, do your banking online and don't get bank statements and eliminate all the clutter. At the end of the year you can always go online and take a look at those statements.

In case of an audit you'd probably need a receipt or check copy anyway. You can print copies of a particular check if you do online banking. I don't keep copies of any kinds of statements.

Personally I don't see a need to as I pay my bills in full every month. And I have to claim the standard deduction as I never have enough medical bills, etc to itemize. Of course everyone's situation is different.

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