If you are feeling overwhelmed as the April 15th tax deadline approaches, you are not alone. Many people delay filing and experience a huge sense of dread as they try to get their tax documents organized and ready to file.
We all know that tax receipts that are disorganized and lying around in piles, musty boxes, and paper clips make it super difficult to prepare the information needed to complete a tax return.
There is a better way.
If you place your receipts, as you receive them, into file folders that are divided into your actual tax return tax line categories, your avoidance and overwhelm will disappear and tax time will become a breeze!
For instance, if you are an entrepreneur, consider changing your habits and, all throughout the year, place your receipts for office supplies into a folder marked office supplies.
When you do this, at the end of the year, all that you would need to do is take out those receipts out of their folder, add them up and voilà! you have the total for the tax line deduction for office supplies!
After adding up the office supply receipts, you can then staple them together and write the total with a sharpie on the top of the pile. Very low tech, I’ll admit, but super easy, organized and effective!
If you are an employee, your tax return is super simple. Simply make files for charitable, income, medical, taxes paid and any other categories on your return. Place your receipts into these files as you go about your year.
Hanging file folders in an actual file drawer, by the way, is considered by industry professionals, including myself, as the best practice method. Hanging files keep your files vertical, and out of potentially collapsed piles, within your drawer.
If you want to ‘up your game’ even more, make duplicate files and mark them odd year, even year. This will keep your receipts separated and you will no longer have 2 years of receipts to sort through when you are compiling your tax return for that one year.
This might sound simple and it is. In fact I have come to realize that the most simple strategies often take the longest amount of time to figure out.
Seth Odam, the inventor of the system I am describing (Freedom Filer) spent 6 years studying IRS tax codes and also how we remember things when he began developing the ultimate system to keep your tax papers and all of your other papers organized. All of the tips I have given you are based on the amazing Freedom Filer paper flow system.
You can put this system together on your own without the need to purchase the system. If you want to cut corners, save time and get your system put together once and for all – Freedom Filer will save you boatloads of time!
Freedom Filer helps you get a jump start join the process because the Freedom Filer Kit comes with pre-printed labels so that you can quickly set up your system.
This is one of the many emails I receive every year after the April 15th deadline:
“Kathi’s tools and training are amazing. it took me 5 minutes to grab my tax information for my accountant and 30 minutes for her to complete them. Thanks to Kathi’s systems.
Just for the record I have personal business and investment components to my taxes. this was not just a W-2 fill in the blanks EZ return.”
Kathryn A Christensen
Remember – preparing your tax return does not have to be an overwhelming and exhausting task. Check out Freedom Filer to learn more.
Feeling overwhelmed but motivated to change your habits once and for all? Contact us to set up a time for a private consultation and get started creating a new way to organize your papers.
We are available to jump start your paper organizing process, in person or virtually. We know that you, like the thousands of clients before you, can solve your paper receipts problem once and for all! Click here to contact us.
By the way, we are in the process of revising the Home Office Organization Course. If there is anything that you need to help you get your office organized, we would love to have your feedback. Give us your ideas and suggestions in the comments section below.