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Plan Well, Retire Well

Saving and investing your money

Get organized - tax season is coming


It comes around every year, but it still catches many of us off guard: tax season. So it's time to pull together all the info that you or your tax preparer will need to complete your 1040, 1040A or 1040EZ.

If you find yourself scurrying each year to find records of your donations, business expenses, IRA contributions, or child care payments, this would be a great time to get prepared for NEXT year.

How big is the stack of documents that you use to compute your deductions and prepare your taxes? If your stack is just a few sheets of paper, all you need is a single file folder or envelope. Label it "Current Year Taxes" and put it somewhere handy, preferably close to where you open the mail

Also set up a file folder on your computer labeled the same, Current Year Taxes. Rather than printing documents that you might misplace, you can drag and drop them into their own place on your hard drive.

Throughout the year, whenever you receive a document you MIGHT need when you file your taxes, drop it into the Current Year Taxes folder.

If your situation is more complicated - maybe you have a home-based business or your have numerous investments that generate taxable income - you may need an accordian file or a directory on your computer. Look for natural groups of information to determine the labels for the divisions in your accordion file or your directory. Some might be:

  • charitable donations
  • investment income
  • depreciation records
  • utility bills (for a home-based business)
  • college expenses

Once this year's taxes are done, move the electronic and paper files to a new folder labeled "Taxes 2010." Now, you're ready to put this year's documents into the Current Year Taxes folders. Next year, it will be a piece of cake.



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