Let’s survey the casualties of April 15: two dozen pencils (snapped in two), one calculator (smashed against wall), 2,007 hairs (pulled from head), and one bank account (severely depleted). If you’re like most people who filed a 1040, you spent about 30 hours getting your act together. Want to limit the damage come this time next year? Then start getting organized now. Your scalp will thank you, even if your bank account doesn’t.
1. Don’t stuff your 2006 return into a drawer. Painful to look at? Maybe. Helpful? Definitely. Mark Steber, vice president of tax resources at Jackson Hewitt Tax Service, says it can serve as your checklist for documents you’ll need to gather during the next nine months.
2. Lorie Marrero, chief executive organizer and creator of the Clutter Diet (www.clutterdiet.com), suggests using H&R Block’s organizing tool at Organizit.HRBlock.com to generate a list of all the documents you’ll need.
Take Up Collecting
3. Set up an accordion file with slots for each category you used this year: 1099s, W-2s, charitable contributions, business expenses, etc.
4. Too complicated? If you use financial-management software like Quicken or Microsoft Money, get a January-through-December accordion file and stash receipts and credit card statements by month, Marrero suggests. Then, when you’re filing your taxes, just search the software for relevant expenses and find the matching receipts by date.
5. Still too complicated? Tack a large manila envelope near your desk, and toss every tax-related document, receipt, and note into it — or use a shoebox. You’ll have to sort it out at year’s end, but at least you’ll have everything in one place. (Steber suggests that you keep that handy-dandy checklist here, too, and mark off items as you get them.)
6. Keep your calendar or day planner, Marrero says, in order to jog your memory about mileage expenses you can claim. If you use an electronic calendar, just print each monthly view.
Time It Right
7. In July, give yourself a tax checkup. Track down any missing info while you’re at it.
8. Meet with your accountant in December (you’re so organized already, so why not?); this way, you can make provisions for any year-end investments, purchases, or giving that could reduce your tax bill. Be sure you spend anything left in pretax benefit accounts — you might even escape the Alternative Minimum Tax.