Comments on: Tax time: Three basic steps to get you closer to filing your taxes on time

By: Luanne

Luanne — Thu, 23 Feb 2012 15:34:16 +0000

Great post! Since I work for myself, I have lots of receipts to keep track of. I keep an accordion file in my cabinet and file receipts throughout the year. It makes things much easier come January. I also use one credit card for most business expenses and itemize those in my accounting software so it’s easy to see how much I can deduct. If I use cash, I write “cash” on the receipts so I can add that to any category on my end of year statement. My appointment was 1 week ago and I just have to write the check… which I’ll put off until April 15!

By: Linda

Linda — Thu, 23 Feb 2012 01:52:54 +0000

As Vickie and Jeri said, DON’T wait until January to make up a file for your tax-related items. I started a file called “2012 TAXES” in January, into which I put copies of charitable contribution receipts, etc. Since it is in my working drawer, I can just throw anything in there that might be relevant. Now I am very grateful that I have everything I need in one place. I agree with WilliamB, too, about the plastic file. This file has made my least favorite activity, gathering the information for our returns, go completely away.

Once you have most of your w-2′s and 1099′s, check the list from last year to see if there are some still coming, then you know whether to start. Since I use Turbo-Tax, I can start the list on the software and then it reminds me of what I had last year so that I look for the same. Quicken tells me which charitable contributions in cash to look for.

Afterwards, I put the copies of the filed documents and anything needed to keep (like receipts for charitable contributions, 1099′s, or w-2′s) into a two-pocket file with the year and “TAXES” and file it away.

By: Laetitia in Australia

Laetitia in Australia — Wed, 22 Feb 2012 23:38:55 +0000

Fortunately in Australia, only the Commonwealth (federal) government has the right to impose income tax. Our tax year is July – June and returns are generally due by the end of Oct.

We have to keep our supporting docs for 5 years after lodgement. I therefore have 5 or 6 cardboard document wallets holding the various years’ documents (since I can’t toss the oldest stuff until 5 years after lodgement but am already collecting receipts for the current year before then).

All relevant receipts go into the current folder either as soon as I receive them or after they’ve been checked off the monthly bank statement.

I write the tax year and what date the docs have to be kept until on the front of the folder. They are labelled in easily erasable pencil so old dates can be replaced with the new dates when that folder’s turn comes around. These folders would probably be over a decade old at least – they only see real use for one year in five.

By: chacha1

chacha1 — Wed, 22 Feb 2012 19:51:21 +0000

Every year we have fewer financial complications (as accounts get merged, closed, etc) and I have a pretty good system. I do our taxes myself.

We don’t itemize deductions so our only “complication” is the Schedule C and related items. After doing this for a few years it’s not a big deal.

There is no advantage to us in filing early. DH is self-employed and we never take a refund – we always apply overpayment to the quarterly estimated tax that would otherwise be due.

However, we also never get an extension, because why do the work twice.

By: DawnF

DawnF — Wed, 22 Feb 2012 16:37:44 +0000

WilliamB is right on. Use a nice plastic file folder that can be reused every year!

I don’t wait until tax time to collect all of my necessary forms, receipts, etc. As the year goes on, each time I have a donation letter or something potentially tax related I go straight to my plastic TAXES folder in our filing cabinet and file it immediately. It is a lifesaver during tax time to grab one single folder and get busy.

Oh, and God Bless Turbo Tax.

By: WilliamB

WilliamB — Wed, 22 Feb 2012 13:56:10 +0000

Separate organizing note: for folders I use constantly (such as “this year’s tax docs”) I use plastic folders rather than a paper ones. The durability justifies the extra cost. My oldest is a decade old and still going strong.

Here’s an example:
http://www.officedepot.com/a/p.....ders-9-12/

By: WilliamB

WilliamB — Wed, 22 Feb 2012 13:53:59 +0000

I do two things to keep my tax work less stressful:

1. I keep a checklist of orgs I should get tax docs from. This includes my employer, my bank(s), charitable organizations, etc. It includes a list of organizations I’ve donated to, with date and amount of donation, which I (should) enter when I donate.

2. I have a folder titled “this year’s tax docs” into which I put every tax-related doc I get. When I’m ready to organize my tax papers, the papers are all in one place, awaiting my convenience.

By: Jo@simplybeingmum

Jo@simplybeingmum — Wed, 22 Feb 2012 13:44:56 +0000

Slightly different system in the UK. Not everyone has to do their own taxes. Unfortunately I am one that does – being self-employed. Our tax year runs Apr-Apr and then we have until Jan the following year to file it and pay. Every year I swear I am going to do it straight away rather than wait, and I never do. It’s been said already in the comments but don’t wait to get organised, do it as you go along. I vow this is the last year I ever delay! It’s the worse feeling ever, after Christmas knowing what lies ahead!

By: Vickie

Vickie — Wed, 22 Feb 2012 06:16:03 +0000

Adding another thought here – even if you think you owe the gov’t money, an extension won’t change that. If you believe you owe money, you’re obligated to send an estimated payment along with your extension.

By: Vickie

Vickie — Wed, 22 Feb 2012 06:12:54 +0000

I ditto everything Jeri just said (active bookkeeper here). Current year file is green and rests on the bookshelf starting Jan 5 or so but it lives in the file cabinet all year. Charitable donations go on an excel worksheet I keep on my computer. Other tax related receipts and reminders go in the file all year long. I’ll make my tax appt probably in a week or so.

Also seconding Mackenzie above. I was still receiving revised tax forms up until about a week ago.

By: Jeri

Jeri — Wed, 22 Feb 2012 02:54:29 +0000

As a recovering tax accountant, the best suggestion I can give is to not wait until January to start organizing. I have a colored file folder labeled “Current Year Taxes”, as paper comes in throughout the year I put it into the file, no more chasing after charitable receipts,etc. and being colored it stands out in a drawer of manila folders. Once I am ready to file my return, I remove everything from that folder and place it into a file labeled with the year and any tax return workpapers, which will ultimately be archived.

By: Wanda

Wanda — Wed, 22 Feb 2012 01:35:00 +0000

Our tax preparation appointment has been on our calendar for almost a year — March 3! My husband and I both know we have an appointment to keep and prod each other to collect all our information over the first two months of the year. What a relief to have a plan and get done before April fools day even! Worst case scenario would be knowing to ask for an extension and why, not just being unprepared.
My co-worker gets an extension every year and still seems overwhelmed and unorganized in October. Extra time doesn’t always make it easier.

By: Jay

Jay — Wed, 22 Feb 2012 01:02:43 +0000

Tax software is indispensable for me.

By: Stephen R Payne

Stephen R Payne — Tue, 21 Feb 2012 23:02:27 +0000

Very timely! I had just called my tax preparer about 2 hours before reading today’s posting. I spent the afternoon seeing if I could use an online version of TurboTax for figuring out my fairly complex tax needs… and decided at the end to give up and call my tax guy. It will cost more, but will be worth it…and now all my tax information is gathered together.

By: Mackenzie

Mackenzie — Tue, 21 Feb 2012 22:51:55 +0000

If I’d done my taxes a week ago, I’d have had to redo them twice by now, since I got two more bits of information last week.