It’s the beginning of the new year–a time when people make resolutions to lose weight, spend more time with family and make other such improvements to their life. Many set goals to get organized in the New Year.
If that is one of your goals, that’s wonderful! I commend you for setting a goal to improve the quality of your life. I have the perfect organizing project for you. When you’ve finished it, you’ll be less stressed and have more time to enjoy the beginning of Spring.
I don’t want you to sort your sock drawer. No, I’m not sending you to organize your garage in the middle of winter.
Your first organizing project of the new year is to: Get Organized for Tax Season.
We’ve all heard about the person who walks into an accountant’s office with a shoebox full of receipts. It’s a stereotype, but if I polled a bunch of accountants, they’d probably tell me that the stereotype is more of a truth than an exaggeration.
If the thought of getting organized for tax season makes you start to twitch, not to worry. I’m going to use a few basic organizing principles to guide you through the process and put a smile on your face and your accountant’s.
Break a Large Task into Smaller Tasks
Prepping for your tax appointment can seem overwhelming. I’ll tell you that a task becomes less overwhelming once it is broken down into many smaller tasks. Do a brain dump of all the things you need to do to prepare for a tax appointment. Then put those tasks into priority order and create a check-off list for you to follow until the last step has been completed. Here’s a helpful checklist for you to download (courtesy of the A Bowl Full of Lemons blog).
Create a Home
In the next few weeks, your mailbox will be stuffed with W-2’s, 1099’s, statements from financial institutions and other papers necessary for filing your taxes. In order to keep track of them, you’ll need to create a place for all of these papers to ‘live’ before they visit the accountant. Normally, I advise people to use shoeboxes an an inexpensive organizing tool but in this case, I’d prefer not to feed the shoebox stereotype. Take a large poly envelope, preferably see through, and place all tax-related documents in there. Have a file drawer or cabinet? Create a hanging file with a tab that says ‘TAXES.’ As they come in the mail, place the tax papers in the file.
Sort it Out/Group ‘Like with ‘Like’
It’s a week before your appointment. Take out that poly envelope or tax file and look at all your papers. If you have a stack of them you’ll need to sort them by grouping ‘like with like’–all interest statements from banks go together, all receipts for gas and tolls should be clipped together, etc. This will enable you and your accountant to process your tax return quickly and with less stress (and coffee).A few tax season Do’s and Don’ts:
Don’t: procrastinate. This is one of the worst things you can do at tax time except for showing up with that shoebox (see above). If you’re doing your own taxes, it won’t be much fun if your version of Turbo Tax unexpectedly quits at 10:30pm on April 15th. You’ll never get your accountant’s full attention if you procrastinate–in fact you might be put on extension. And by then, you’ll be talking to the secretary if she hasn’t fallen over from working overtime for the past three months.
Don’t: arrive at your accountant’s office with your statements in their sealed envelopes unless you want to see his/her head pop off. If your accountant’s head does not pop off, it’s because they have already decided that they will charge you for having to open all of your envelopes.
Do: take the Social Security numbers of all family members you are filing taxes for. If you or a member of your family owns a business, bring the tax ID number with you as well. Your accountant will thank you a hundred times for being prepared with that vital information.
Do: collect all proof of donation papers (thrift stores, schools, great causes, etc.) throughout the year and keep them in the poly envelope or tax file discussed above. You’ll need them to get that tax deduction!
Tax season does not have to be a painful time of year. With some preparation and organization, you’ll be on your way to a less stressful and more relaxed way to pay Uncle Sam.
Stacey is a Professional Organizer, Virtual Organizer, and Author in Bergen County, New Jersey specializing in home organizing, time, and paper management. She is the author of The Organized Bride’s Thank You Note Handbook: Let Systems and 101 Modern Sample Thank You Notes Take You From Overwhelmed to Organized.
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What great tips, Stacey, to make the dreaded tax season more bearable! I like your sense of humor too, which goes a long way, especially for these types of topics. Years ago I started using Quicken. That has made receipt keeping and putting together a tax summary for our accountant much easier. Having a hanging tax file to put relevant tax papers and forms into during the year, helps to pull things together quickly when tax time comes.
I like your hanging tax file idea! When I start a paper organizing project with a client, I always ask if they have a place for their tax-related papers. If not–I usually make them a hanging file. I have long-term clients who still have that original hanging tax file I created for them–it works!
We use Quicken as well. I love it, although it is a challenge since we are Mac based. I think having a good system during the year can definitely reduce the stress around tax time. I’m totally laughing about opening envelopes before you head to the accountant. At those hourly rates, do all you can before you go, right?
As we Organizers know, creating systems reduce stress–even at tax time. And opening those envelopes before heading to the accountant is part of the system. Systems save money, too!
I’ve heard the shoebox story from enough bookkeepers and accountants to believe that it’s no exaggeration.
My brother-in-law is an accountant–the shoebox is no myth–it’s a reality!