Now that tax season is over, you might think, “what can I do to make this process easier?”. There are many approaches to handling the myriad of paperwork we face every day, but you have to find the one that works for you. Some people like to keep everything related to their monthly bills, while others throw out all but the most important items. I believe there needs to be a happy medium.
No matter how you track your payments, whether it is through a special software program, such as Quicken, Quickbooks, Excel spreadsheets or just keeping up with your checkbook, you will need to retain your receipts for a certain period of time. Refer to our Record Retention Guidelines found at the bottom of the “What’s New” page on our website, then start the process of preparing for next year right now!
I like to put my bills in monthly files, then at the end of the year, throw out all insignificant non-tax related items. I keep such receipts as those related to car maintenance & repairs, large items purchased that might have a warranty or that I expect to last more than a year, improvements to my home, and other important documents. I have what would be considered permanent files where these items go. As year-end information comes in, I put them all in one special file.
Some people prefer to toss the unnecessary monthly bills each month. These bills might include supplies purchased for personal use, cable TV bills, etc. If you work at home, be careful when it comes to utility, telephone and other bills which might be used to calculate a home office deduction. For the bills you keep, always make a note as to the date paid, check number and the amount, if different from the bill. This notation will help you track the payment should the need arise.
If you’re in the habit of tossing, rather than keeping, then you will still need a place to corral the important documents. If you’re not a person who will file, then a large manila envelope might just be the ticket. You can have one for each category that is needed to easily find the receipt later, such as, medical expenses, auto expenses, property taxes, insurance, etc. Some people like to have a box or bin of some sort where they can easily accumulate a year’s worth of payments. This necessitates a lot of rummaging if you find that you need to refer to a bill later.
Whatever your style, you want to make sure that come tax time next year, you have the information readily available to complete the organizer. Even if you don’t complete the organizer, you can use it to check off the information you have to reveal what is left to gather. Then before you make your appointment for your tax preparation, you can see whether you have received all your Form 1099s and if you need to obtain more receipts for your expenditures. The more prepared you are for the meeting, your tax advisor is better able to give you the best service possible. That’s where I’m coming from.
--- Rosa Read, CPA – Senior Staff Accountant
No matter how you track your payments, whether it is through a special software program, such as Quicken, Quickbooks, Excel spreadsheets or just keeping up with your checkbook, you will need to retain your receipts for a certain period of time. Refer to our Record Retention Guidelines found at the bottom of the “What’s New” page on our website, then start the process of preparing for next year right now!
I like to put my bills in monthly files, then at the end of the year, throw out all insignificant non-tax related items. I keep such receipts as those related to car maintenance & repairs, large items purchased that might have a warranty or that I expect to last more than a year, improvements to my home, and other important documents. I have what would be considered permanent files where these items go. As year-end information comes in, I put them all in one special file.
Some people prefer to toss the unnecessary monthly bills each month. These bills might include supplies purchased for personal use, cable TV bills, etc. If you work at home, be careful when it comes to utility, telephone and other bills which might be used to calculate a home office deduction. For the bills you keep, always make a note as to the date paid, check number and the amount, if different from the bill. This notation will help you track the payment should the need arise.
If you’re in the habit of tossing, rather than keeping, then you will still need a place to corral the important documents. If you’re not a person who will file, then a large manila envelope might just be the ticket. You can have one for each category that is needed to easily find the receipt later, such as, medical expenses, auto expenses, property taxes, insurance, etc. Some people like to have a box or bin of some sort where they can easily accumulate a year’s worth of payments. This necessitates a lot of rummaging if you find that you need to refer to a bill later.
Whatever your style, you want to make sure that come tax time next year, you have the information readily available to complete the organizer. Even if you don’t complete the organizer, you can use it to check off the information you have to reveal what is left to gather. Then before you make your appointment for your tax preparation, you can see whether you have received all your Form 1099s and if you need to obtain more receipts for your expenditures. The more prepared you are for the meeting, your tax advisor is better able to give you the best service possible. That’s where I’m coming from.
--- Rosa Read, CPA – Senior Staff Accountant