Taxes. Ugh - just the thought of them makes us cringe! However, since they're inevitable, the sooner they're attended to, the less stressed you'll be.
January is the best time to get started. But if you didn't do it last month, do it now!
Here's a system to make tax time easier:
• File only the current year's paperwork.
• Purchase a shredder!
• Clear out papers that you will NOT need at your fingertips in the coming year.
• Shred sensitive material not required for tax purposes.
• Alphabetize file jackets (hanging files) by categories and label. For example: Autos, Banking, Credit Cards, Higher Education Expenses, Insurance, Investments, etc.
• Label file folders (these will be inserted into your individual hanging jackets). For example, under Autos, if you have more than one car, make a folder for each; banking, make a folder for each account; credit cards, a file for each; and so on.
• Now that your daily files are set up, use the same system and include the year for the files that need to be stored.
• Using the same system, set up files for the paperwork you'll need to file your current taxes.
• Set up a folder to collect all the W-2s, mortgage-interest info, etc., as they arrive.
• Once you've filed your return, place all of last year's tax info into your permanent storage container and store in a secure, dry place.
If you adopt this simple system and file your paperwork throughout the year, April 15 will be just another day.
This article originally appeared in Lifestyle Insights on February 15, 2010