You are not alone in your belief about taxes being too complicated. The other day I left a comment/rant on Get Rich Slowly saying essentially the same thing. But I feel that most people have bought into the notion that taxes have to be complicated, and since their software/accountant tells them they saved more money than the cost of tax prepration, they think they came out ahead. As long as people keep thinking like that, our system will keep getting more and more complicated.

It’s simple: hanging files take 3x as longer to create than simple manila folders (mostly due to the nature of the labels). Also, you can’t grab a hanging file and go–the metal parts stick out and snag and look ugly. So you always have to use hanging folders *plus* manila folders inside. Allen’s suggestion is that if you’re more comfortable with hanging folders, go ahead and use them, but only put one manila folder in each hanging folder, and don’t bother labeling the hanging folder (unless you really really want to).

If it’s a time-consuming pain to create a new folder, you will resist creating a folder for that single piece of paper that really deserves one. (For example, the first W-2 you receive deserves a folder, because more will probably be coming.)

Besides, any good filing cabinet comes with a sliding support at the back of each drawer that will work just fine for keeping manila folders standing.

As for paying taxes, am I alone in my (overly stubborn) belief that I should not have to pay money to file my taxes? If the tax system is too convoluted for the average citizen to pay taxes, there is an unforgivable problem with the tax-collection system.

Besides, no one has to read the 600+ page tax code. The IRS makes all the information available on its website in human-readable publications available as free pdfs. You (and/or your spouse, if applicable) have to decide whether or not you are going to itemize or take the standard deduction. If you choose the latter, taxes are a piece of cake to do by hand with a calculator. If you choose deductions–well, you have to gather and organize all the supporting documents anyhow (unless you want to get charged an arm and a leg for making your accountant sort through it all). So you may as well set aside a few hours to plug and chug the numbers.

Besides, doing your own taxes forces you to take a close look at your finances for the past year. That’s a good thing.

I thought audits were limited to 7 years back, how is the IRS putting the onus on you to prove you paid taxes almost 14 years ago?

However, more and more documents are becoming available electronically. I don’t know if this is legal in the US (I’m Canadian), but tax slips from at least banks and universities are starting to be available electronically. However, if you pick that option, you have to make sure that you go in and download the slips to use with everything else.

I live in a small one bedroom apartment and saving space is a MUST, make “soft” copies of everything really cuts down on the amount of filing space one needs.