How I Organize Our Tax Documents in Minutes!

posted by Andrea | 01/23/2012

Every year around this time, I start getting lots and lots of emails from people who are overwhelmed and don’t know how to get all their tax documents organized for the upcoming tax season.

And while I know it can seem like an extremely time-consuming task, I use a really SIMPLE system that allows me to have all my tax documents ready to go within minutes… seriously!

Here’s what I do…

1. Create.

At the beginning of each new year, I create a manila file for that year’s taxes {I just created my “2012 taxes” folder a couple weeks ago}

2. File.

Over the course of the next 12 months, I immediately file EVERY document I will need for tax purposes into that manila folder.

3. Evaluate.

When it’s time to have our taxes done, I quickly look through our folder to make sure I have all the documents I need, and then bring it to our accountant.

I’ve been using this ultra-simple method to organize our personal and business tax documents for the last several years; and so far, I haven’t spent more than a few minutes getting all our tax documents organized for our accountant.

And I’ve never needed to go back and find something that I forgot or misplaced.

It might be too late to implement this system for your 2011 taxes, but it’s the perfect time to create a folder for your 2012 taxes. I guarantee you’ll thank yourself next year when it only takes 5 minutes to get things organized!

How do you organize your tax documents?

Related Posts Plugin for WordPress, Blogger...

Filed under: OrganizingPaper

 
 

16 comments

  1. Firesparx

    01/23/2012

    I have almost the same technique except my file folder is labelled “Current Year Tax Docs”. That way I don’t have to make a new folder every year. When we get our taxes back I file them into a two-pocket folder (hubby’s taxes on one side, mine on the other).

    [Reply]

  2. Kristia {Family Balance Sheet}

    01/23/2012

    I do something very similar and I have a post ready for tomorrow about the topic. We have our tax meeting this week….tis the season.

    [Reply]

  3. skye @ neathering our fest

    01/23/2012

    we have two envelopes – one for my husband (who is a pastor) and one for my business! it seems to work pretty well for us! :) but i agree that immediate filing is the best way to do it. no matter what you keep it in – as soon as you get that receipt or document, stick it in the folder! that way there is no chance to lose it! :)

    [Reply]

  4. Heather Ratliff

    01/23/2012

    That’s exactly what I do! When I file our taxes, a printed copy goes in one file folder with the TurboTax CD and I keep the CD for the same number of years I keep other back up documents (7, I think). I keep all my backup documents in a plastic shoebox and store it in the top of a closet. Then I clean out the documents each year and use that now-empty box for this year’s documents.

    [Reply]

  5. jerilyn

    01/23/2012

    I do this but usually start my folder in January for the last year. I seem to only need W-2s, bank and church giving statements. Um, what should I be putting in all year?

    [Reply]

  6. Heart and Haven

    01/23/2012

    I also use a manilla folder for the year, ie. “2012 Taxes”.

    Also, for my rental properties – I created an Access database where I keep track of all our expenses (ie. maint., repairs, utilities, etc.). I have a box that I keep next to our file cabinet to place the receipts, then enter them into the database from time to time, and file the receipts as back-up in case of an audit. With the Access database, I can easily print out a report (listed by property and year) of all the expenses with totals at the bottom to make it easy for my accountant.

    I also keep an Excel spreadsheet (adding a new worksheet for each year) where I track things like medical costs, childcare costs, donations, car registrations, mortgage interest & property taxes.

    - The reports I print out for my accountant saves me money by having the totals in a convenient format for him, rather than paying him by the hour to add up all my receipts that can be used for tax deductions.

    [Reply]

  7. Anna

    01/23/2012

    I do the same thing, except I use a large envelope. It’s a huge help to just take a minute during the year and immediately file what I need and have it all right there when I get ready to do my taxes.

    [Reply]

  8. Lyn

    01/24/2012

    In addition to bank statements, giving receipts and W-2s, you need real estate tax bills, medical and Rx receipts, 1099s from investments, receipts from donations of goods at Goodwill and receipts from donations of new items (back-to-school supplies in August, angel tree items in November and December, etc.).

    I also use an envelope to keep track of it all.

    [Reply]

  9. jackie

    01/24/2012

    I have been paperless since 2009, Quicken allows you to attach copies of any payment, so I attach them as I enter the entry in the register, shred and recycle the paper….no paper to to store or file!

    At the end of the year I put any end of year statements in the file for the accountant and if they need a copy of anything I just print it off and send it over. Love not having the big file to hold on for 7-10 years! Whooo Hooo!

    [Reply]

  10. Tara

    01/24/2012

    This is such a surprisingly easy system! The unfortunate thing (for me, anyway) is that no system works unless I actually work it, and I always fall short. I guess if I put the file somewhere easily accessible it might be easier to do, but I still forget to put stuff into the folder. Gah!

    [Reply]

  11. Organize your morning with a soundtrack | Smart Living Blog

    01/25/2012

    [...] Of course, there’s at least one major hurdle standing between you and that perfect vacation: April 15. Tax Day is coming up fast, and Andrea Dekker offers “a really simple system that allows me to have all my tax documents ready to go within minutes … seriously!” If you follow her filing advice throughout the year, Dekker says it won’t take more than 5 minutes to get everything organized when you’re ready to do your taxes. (Simple Organized Living) [...]

  12. Patty Gardner

    02/01/2012

    My system is similar except that I write details on the front of the file. I have spaces for personal property taxes, health insurance (we’re self-employed), real estate tax, etc. As those papers come in, I write the amount on the front of the file and place the supporting document in the file. Then when I do our taxes (using Turbo Tax), everything is on the front of the file. And I can see at a glance what information is missing.

    [Reply]

  13. michelle

    02/24/2012

    What about all your business receipts, mileage etc? Home office deduction stuff, utility bills etc? Are they all in their or do you have another business file?

    [Reply]

    Andrea Reply:

    I have a separate folder for my business taxes — but I also do a lot of that online at http://www.outright.com

    [Reply]

  14. Davina

    01/24/2013

    I have used the exact same system and it works great! I never have to hunt for my documents. They only thing I do different is I use a red (or any colored folder) so it’s easy to see in the drawer.

    [Reply]

  15. Melissa

    01/24/2013

    Same system here. My husband likes to start estimating our refund every year before Christmas, so it’s nice to have it all handy for him. Even though we all know official papers don’t come until end of January – he can’t help but get started :) I intend to go paperless over the next year, but I’ll always do this for taxes.

    [Reply]

Leave a comment

Notify me of followup comments via e-mail. You can also subscribe without commenting.