Real Solutions For Living...Organizing For Tax Time?

Now that a new year is underway, why not decide that this year's tax information will be organized right from the start?

If you haven't already done so, now is the time to remove all 2006 files from your filing system. All bank statements, phone bills, credit card statments, medical bills, and any other file containing 2006 information should be removed. Set these files aside for now.

With all of the past year's information removed, take a good look at your current filing system. Has your current system worked well for you this past year? Do you have adequate categories for the information you need to file away? Are there any categories that should be re-named, removed, or added? What do you anticipate needing in this new year? For instance, should you add a file for "college loan information"? In what ways should your filing system for this new year be updated?

Take the necessary steps to have your files named and organized in a way that meets your current needs and those you anticipate having within the new year. If you so desire, create a new system that is color-coded or have file names that you can remember better. Replace tired and worn file folders with fresh new ones. How else could you update your system? When we have a filing system in place that reflects the way we think and what appeals to us asthetically, we will be more apt to use it correctly on a regular basis.

Now for those files you removed and have set aside. As your End-of-Year Statements begin to arrive in the mail, cross check these statements with the information you pulled from your files. If all information matches up, then you are free to discard all deposit slips, monthly statements, and so forth that are accounted for in your End-of-Year Statements.

Always check with your accountant to be sure what is safe for you to discard. There are general guidelines most of us can follow, but there may be different criteria for particular individuals in different situations. Regardless of what is advised here or in any other resource, always check with your accountant first before taking final action.

With that said, place all 2006 papers that are needed for filling out your tax forms into a folder or envelope marked "2006 Tax Information". Keep this folder handy, putting all tax information that continues to arrive into this folder. When it's time to fill out your tax forms or give your tax information to your accountant, everything you'll need will be in one place--the "2006 Tax Information" folder.

To have successful retrieval of tax information next year, begin now to file away every paper that is relevant to taxes. At the very least, set aside one day a month to file all of your paperwork for the month away. Staying on top of the filing will go a long way when you have to prepare for taxes again.