Can it be true? Let’s face it. Tax time is never synonymous with Spring Break. When April 15 is mentioned, visions of beach blankets and coolers don’t dance in your head, but it also doesn’t have to conjure up visions of Excedrin and chain smoking Marlboro Reds.
The funny thing about April 15 is that it’s like Christmas in that it happens the same day every year but we still manage to find ourselves woefully unprepared. Why is that? Avoidance and denial are never good tactics, and burying one’s head in the sand doesn’t even work for ostriches. How can you take the stress out of tax time? Plan and prepare. While it may be too late for 2012, how about incorporating some positive strategies for next tax season.
1. Create a 2012 tax folder and keep it within reach. During the year, toss your charitable receipts, tax forms and other documents into it.
2. Create a “chron” file for 2012. You can either do it by month or by vendor (Dominion Power, Verizon, Comcast) and put your bills into it. Credit card and bank statements also go into your chron file.
3. Within your chron file, create a folder for receipts (you may also want to break down into additional categories like home, business and medical).
4. Keep a bin or basket handy and toss your bills, statements and receipts into it at the beginning or end of each week. Empty out your wallet or clear out your mail bin. Once a month, spend 15 minutes cleaning out your bin and filing into your chron file.
The beauty of the “chron” file is that it is easily moved and relocated to your accountant’s office and then archived to the back of the file drawer or the basement. You can either put your tax file in front of the chron file for the year it pertains to or keep your tax files all together in one location. Once your return is filed, place a copy of the return and any supporting documentation into the tax file.
This system is fairly simple and works much better than your current
system of black trash bags and receipts on the floor board of your car.
Life just got… less stressful and more organized!