Monday, March 26, 2012

Organizing Paper Files // Taxes

My messy file cabinet
For a few years, I've had the lofty goal of going through and reorganizing my paper files every few months rather than once a year or less.  I finally figured out that that was NOT going to happen, and decided to continue with dealing with it just once a year when preparing to do our taxes.

I'm a person who likes to keep everything for "just in case."  True, no one is going to care how much we spent on our water bill 15 years from now, but you just never know.  It really doesn't take that much space to keep and I'd rather "have it and not need it than need it and not have it."  So, the first thing I do is take out all bills, statements, and other paperwork for the previous year and put them in large envelopes to be stored away.  This year, I took my labeler and labeled my file folders.  This helps to give a fresh new start to my filing cabinet.

One thing I did this past year that really helped save on time was to use a file folder box (the cardboard box that file folders come in) to throw in my tax deductible receipts and other documentation.  Inside this box there are folders for each type of document (income, charitable giving, medical, work-related, real estate taxes, etc.).  When it comes time to get things together, it's very easy to put the receipts in the appropriate folder and then go from there.  I was able to put together all the information in one evening, rather than in a couple or several days like in the past.

Another thing I do to save time -- not MY time, but our accountant's time (which saves us money) -- is to include a list of everything that's included with totals for each category.

Another new thing I did this year was create a table that listed all of our medical-related visits -- copays for office visits, procedures and tests done, etc. -- along with how much we paid for each AND the mileage for each visit.  I did not realize, until last week, that mileage for medical stuff is tax deductible (providing your medical expenses total more than 7-1/2 % of your income -- I think that figure is correct.)  I also did not know that any insurance premiums you pay (including supplemental coverage for medical-related coverage including cancer) can count for that total as well.

I put all tax-related stuff in that file folder box, and I take that to my accountant.  I think it's easier than manilla envelopes, and it can easily be reused every year (with help from packing tape to keep it all together).  It's not pretty, but it works!  When I get my paperwork back along with our return, I put it all in a large envelope and store it with the other envelopes.  Then my file folder box is ready to use for this year's tax stuff.

I still need to go through my other files (reference, ideas, old schoolwork, etc.) to see what needs to be reorganized, thrown away, and labeled.  My mom has been visiting us and is sleeping in my office which is QUITE crowded right now, so I'll have to try to take care of it after she leaves.
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