Tax Season tends to be a tedious time as you try to sort through twelve months of bills, receipts, figures, and more. Creating a filing system now can help you sort through the mounting mess of figures on numerous sheets of paper. Everyone has a specific way that they file their taxes with or without an accountant. Organize yourself based on that personalized preference of filing your yearly taxes. I personally create a file (hanging files) for each important bill/statement that arrives each month (i.e. mortgage statements, electric bills, Verizon bills, American Express statements, etc. These are important documents that are filed and organized in my hanging files each season (end of winter, end of spring, end of summer, end of fall——-and one last time, tax season). Keeping these documents organized once a season helps minimize the monumental task during tax season!
Additionally, I keep an envelope filing system for items that come about more than once a month (i.e. medical bills, donation receipts, preschool expenses, etc.). I label the envelopes with the appropriate title. Each time a relevant receipt appears, I file it in the envelope. On the back of the envelope, I write the date, a small memo (name of Dr.’s office, etc.), and the money figure. When the envelope begins to bulge, I seal it and total out the figures on the envelope. I write the total on the envelope and begin a second one with the same title and label it #2. The totaling helps me again during tax season rather than waiting 12 months to create totals for the year. A few envelopes that I touch each month are:
- Medical Expenses Not Covered by Insurance (I only file receipts after I have paid the bill. I attach the check or credit card name for easy referencing if ever needed.)
- Preschool Expenses (Supply Fee, Monthly Tuition, Snacks, Extra Supplies, etc.)
- Donations (St. Jude, Union Mission, Operation Christmas Child, etc.)
When you meet with your tax accountant and/or implement changes in your life such as running your own business, you can add additional envelopes that help you keep accurate and current logs of receipts you’ll need for the upcoming year’s tax season (i.e. gas receipts, food expenses, hotel expenses, etc.). Get in the habit of writing a mini note write on the receipt and you’ll always remember where your money is being spent!
Every receipt needs a file! How do you organize your paperwork?
P.S. Remember that H&R Block and TurboTax are offering free online Federal Filing!
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