Organizing Your Tax Papers

Tax time (and maybe spring) is right around the corner.

It is that time of year again, that many dread....tax time! 

This year you have until April 15, 2013 to file your taxes in the United States. Let's make 2013 the year that you do not have to file an extension.

For easy organizing of tax related paperwork, I recommend three basic files:

1) Annual Tax File

This can be as simple as a box or hanging file folder labeled "2012 Taxes". Employers and financial institutions are required to send financial statements (such as W2s and 1099s) by January 31st, while brokerage houses have a later deadline. While you are at it, make a file for 2013 as well, so you can place items inside (such as donation or property tax receipts) as they occur throughout the year.

2) Flexible Spending Account File

If you do not participate in a Flexible Spending Account (FSA) or similar program with your employer, skip ahead to item number 3. If you do participate in an FSA, be sure to organize and submit all of your claims before the grace period (typically 2.5 months) ends for your plan. This will prevent you from losing your pretax funds contributed to the account. 

3) Medical Expense File

This can be the most complex of the three tax files listed here, particularly if you have enough medical expenses to deduct from your taxes. There are many ways to organize a medical expense file. A three ring binder for each family member, organized by service date (i.e. the date you went to the doctor) is generally the easiest way. You can tally out of pocket expenses on paper in each binder or create an expense category using a computerized tool such as Microsoft Excel or Quicken.

If you have specific questions regarding taxes, always consult with a tax expert, such as a CPA. 

Carolyn Anderson-Fermann is a public speaker, organizing expert and founder of Simply Organized Life. Do you need to conquer the clutter in your closet? Carolyn will be presenting "Conquer Your Closet" through Ann Arbor Rec and Ed on Friday, March 15, 2013. Register with Ann Arbor Rec and Ed. 

Donations

Source:  detroit.donatestuff.com

Purple Heart is coming to my house today. And this makes me happy. To maintain organization in your home, it is really important to let go of the things that you no longer use, love or treasure. 

Ralph Waldo Emerson said it best:

"You must let go of a thing for a new one to come to you."

In order to make donating old items really simple, here is what I do in my own home:

1) Always keep a box or bag at the ready for donations. 

I like to use medium size cardboard boxes for my donations and keep them in my closet. This makes donating items super simple. Whenever Purple Heart calls me to see if I have anything to donate (and I almost always do) all I have to do is tape up the box and put it on the front porch. 

Having a home for donations also gives me an immediate place to put items at the moment that I decide I no longer need them. These things are now out of site and no longer cluttering up my space.

2) Keep a running tally of donations for tax purposes

On a shelf near my donation box(es) I keep a simple piece of paper where I write the item and its estimated value. I always low ball the value based on how it might be priced at a garage sale. When an item goes in the box, it is added to the list. Then, when I receive the receipt from the charity, I just staple the list to the receipt and put that in my tax file. 

Due to updated tax laws, some CPAs also recommend taking photos of the items. However, do not get so bogged down in the details that you end up keeping a lot of things you no longer need. Always check with your CPA or tax preparer for specific recommendations. 

3) Have a plan

Half of the battle in getting rid of donations is knowing where to take them. I like Purple Heart because all I have to do is put the stuff on my front porch and they pick it up. They also call me periodically when they will be in my area. 

If charities make regular rounds in your neighborhood be sure to get on their calling list. This can be a great motivator to let go of your excess. If not, have a plan of where you will take your donations when they start to pile up. In the Ann Arbor area, we have a plethora of great charities that will take your gently used off casts. 

Carolyn Anderson-Fermann is a public speaker, organizing expert and founder of Simply Organized Life. On Friday, March 2, 2012 Carolyn will be presenting "Secrets of a Simply Organized Life" with Ann Arbor Rec & Ed. There is a $25 fee for this public event. Register with Ann Arbor Rec & Ed. 

Organizing Your Tax Papers

It is that time of year again, that many dread....tax time!

This year you have until April 17, 2012 to file your taxes in the United States. With an extra day in February (yes, it is a leap year!) and two extra days in April, let's make 2012 the year that you do not have to file an extension.

For easy organizing of tax related paperwork, I recommend three basic files:

1) Annual Tax File

This can be as simple as a box or hanging file folder labeled "2011 Taxes". Employers and financial institutions are required to send financial statements (such as W2s and 1099s) by January 31st. While you are at it, make a file for 2012 as well, so you can place items inside (such as donation or property tax receipts) as they occur throughout the year.

2) Flexible Spending Account File

If you do not participate in a Flexible Spending Account (FSA) or similar program with your employer, skip ahead to item number 3. If you do participate in an FSA, be sure to organize and submit all of your claims before the grace period (typically 2.5 months) ends for your plan. This will prevent you from losing your pretax funds contributed to the account. 

3) Medical Expense File

This can be the most complex of the three tax files listed here, particularly if you have enough medical expenses to deduct from your taxes. There are many ways to organize a medical expense file. A three ring binder for each family member, organized by service date (i.e. the date you went to the doctor) is generally the easiest way. You can tally out of pocket expenses on paper in each binder or create an expense category using a computerized tool such as Microsoft Excel or Quicken.

If you have specific questions regarding taxes, always consult with a tax expert, such as a CPA. 

Carolyn Anderson-Fermann is a public speaker, organizing expert and founder of Simply Organized Life. On Friday, March 2, 2012 Carolyn will be presenting "Secrets of a Simply Organized Life" with Ann Arbor Rec & Ed. There is a $25 fee for this public event. Register with Ann Arbor Rec & Ed.