Eliminate Residential Chaos
Eliminate Residential Chaos

 

 

 

Kitchen Design by Provanti Designs – Gail Monica Dent ⚬ John G Wilbanks Photography

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 In this issue


 Featured Article:  Organizing Your Taxes

Often I am asked: "How long should I keep paper records?" The answer to this question varies depending on whether you are filing a personal tax return or taxes for a business you own and operate from your home. Publication 552 (Rev. 4/2005) as published by the Department of the Treasury, Internal Revenue Service, lists the guidelines for how long records should be kept. Publication 583 gives the guidelines for "Starting a Business and Keeping Records." If you have questions regarding the length of time to keep records for a particular need, you may want to consult with your certified public accountant.

Keeping Your Tax Records Organized

When the time comes to prepare your taxes, these documents will be easy to locate, not to mention the fact that by having an established location for them, they will not be miss-placed during the year. This list is not meant to be an entire list of documents that you receive in the mail – you may receive some that are not listed here and some that are listed, you may not receive. The idea is to have a location for you to store these types of documents that you get one time only, or in the case of donations perhaps several, so that you can quickly locate them when it is time to prepare your return. It does not make a lot of sense to create a folder for each type of form – that will just take up more space in your filing system.

Why Keep Records

  • To use when preparing your tax return
  • To support items reported on your tax return
  • To identify sources of income
  • To track expenses
  • To keep the cost basis of property or investments

Keeping Your Tax Records Organized

The IRS does not require you to keep your tax records organized a certain way. There are however a few things that you can do to make your life easier when it comes time to prepare your taxes. The last thing you want to do is spend all of your time looking for the documents needed in order to prepare your taxes. I personally have witnessed many of our clients that have not been able to file their taxes for several years because they could not find all of the information they needed – which is usually why we are called in to help them set up a system to organize their papers, so they can begin to file taxes on time, rather than filing an extension or not filing at all.

Tips for Keeping Your Tax Records Organized

1. Establish a file folder labeled Taxes 2006 (insert the current year on the label). This folder will be used to store tax related documents such as donation receipts and the forms you receive in the mail in January that you need to prepare your taxes. Some of the forms you may receive in the mail include:

  • W-2's for yourself, spouse and dependent children

  • 1099-G (Unemployment)

  • 1099-INT (Interest Statements for Mortgage, Savings, Escrow and U.S. Bonds)

  • 1099-DIV (Dividend Statements for Stocks and Bonds)

  • 1099-MISC (Income Statements for Income Property and Equipment)

  • 1099-R (Statements for Pensions, Annuities and IRA distributions) Social Security Statements the show benefits

  • Property Tax Documents

When the time comes to prepare your taxes, these documents will be easy to locate, not to mention the fact that by having an established location for them, they will not be miss-placed during the year. This list is not meant to be an entire list of documents that you receive in the mail – you may receive some that are not listed here and some that are listed, you may not receive. The idea is to have a location for you to store these types of documents that you get one time only, or in the case of donations perhaps several, so that you can quickly locate them when it is time to prepare your return. It does not make a lot of sense to create a folder for each type of form – that will just take up more space in your filing system.

2. If you make a lot of property donations, such as used clothing, toys, computer equipment or  
   household items, consider using "It’s Deductible" from Turbo Tax.

Using this software it will help you:

a. Assign Accurate Values by accessing thousands of values for the items you donate to charity.

b. Track 2006 Donations.

c. Automatically prepare the IRS Tax Form 8283 which is required when noncash donation deduction is over $500.

d. Prints reports you need on the correct form and makes it easy to substantiate your deductions.

3. Receipts. Use an accordion style folder or multiple envelopes to track your receipts by month. If you use an accordion file folder system for receipts, you can purchase one with the tabs already labeled with the months on the tabs. Store this in a location that is easily accessible so that when you need to deposit your receipts you can do so directly in the file. If you chose to use envelopes to keep receipts in, write the month and the year on the front and keep the current month’s envelope in a location where you can quickly access it. If you need to break down your expenses by category, you may want to consider doing so once per month, perhaps at the end of the month, before filing away that envelope and getting out a new one for the next month. This will take much less time than having to categorize an entire years worth of receipts. Some of the categories you may want to use are: clothing, groceries, personal care items, gas, entertainment etc…

4. If you prefer to track your expenses using computer software, there are two commonly used programs: Microsoft Money and Quicken by Intuit. These software programs are designed to allow you to track your spending and expenses, balance your checkbook and download bank statements from the Internet, pay bills online, create and manage a budget, transfer data to Turbo Tax, manage investments and much more. One of the many nice things about using software to manage you money, you can categorize your expenses so you can tell in a snap how much you are spending in a particular area – which will then transfer over to your taxes. An example of this might be keeping track of your medical expenses for the year so that you can apply this when you prepare your return.

 5. After you’ve completed your tax return, be sure to keep a copy of the return along with all of the supporting documentation. You can use your "Taxes 2006" folder – or the folder appropriate for that year to file away the copy of your return. If you have an accountant that prepares your return, most likely you will receive a copy back from he/she and you can just keep your tax return in that and file it away with your other tax records.

6. Keep a rotating tax file. If you do not have space in your current filing system to store six years worth of taxes, you may want to consider purchasing a filing box made of plastic that has rails in it to hold hanging file folders. This box becomes your "Tax Records" box that you can store in an out-of-the-way location, yet you will still be able to put your hands on it when the time comes.

Creating the system:

Step 1: Outfit your box with six box-bottom hanging file folders labeled Years 1 through 6 (rather than by the year itself) to avoid having to re-label annually.

Step 2: Keep last year’s tax records and related receipts in the Year 1 folder, the previous year’s records in Year 2 and so on.

Step 3:  When you are ready to file the current year's tax records, toss/shred the contents of the "Year 6" folder and move each set of records back one folder and then put the current years taxes in Year 1.

Step 4: Place the box in your attic, basement, closet or some other place where you can quickly locate it if you ever need one of your returns. Be sure to inform other family members of the location of the box.

Keys to Success

The key to success and time-savings is to develop a system you will use on a regular basis so that when it is time to prepare your tax return you do not need to spend hours searching for receipts and charitable contributions.

ã 2007 Eliminate Chaos, LLC

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April Organizing Savings

In honor of National Organize Your Files Week (April 15-21st) receive one free hour of office organizing with Margaret when a full day is purchased.

A Savings of $75 to $90

Appointments must be booked by April 30, 2007.

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Office Organizing Makeover - The Results

In January, Eliminate Chaos and IKEA sponsored a contest with Movin 92.5 to give one lucky winner an Office Organizing Makeover. In February we told you about Dawn's office and why we selected her. After experiencing several deaths in her family in 2006, Dawn needed a fresh start for 2007.

After several hours of hands-on work, design, painting and installation - Dawn now has a beautifully organized and functional office.

All of the office products pictured (not including the product in the closet) was less than $1000 for this Office Makeover and was donated by IKEA. Margaret, Christine and Laura donated their time to help Dawn transform her office.

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Dawn's Office Before                   Dawn's Office After

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Dawn's Desk Area Before....................................and After!

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Dawn's Closet Before                                                  Dawn's Closet After

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Product Special - Captio Tax Case

Receive a FREE Eliminate Chaos Journal Book with Pen with your purchase of a Tax Casealt

Take the panic out of tax season with the Captio TaxCase.  The TaxCase makes it easy to manage your tax information and paperwork year-round so there's no last-minute crunch at tax time.  Whether you do your own taxes or have them done, you'll be ready to file with all your information organized and in one place.  Reuse it each year with free online refils from Captio. 

Features: Eight Topic Sections, Information Pages, Worksheets, Checklists and Pre-Printed Labels.

Just $29.95 for peace of mind! 

Click here to purchase and receive a free copy of our Journal Book - a $7 value.

 


 

IKEA Seminars - Seattle Schedule for 2007

April 14, 2007 - Eliminate Chaos®...In Your Garage

May 19, 2007 - Eliminate Chaos®...In Your Kitchen - NOTE:  THIS IS A NEW DATE

Click here to access our complete Seminar & Class schedule  

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Class Schedule:  Eliminate Paper Chaos at Discover U

May 17th from 6:30 - 9 pm

Click here to Register 

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FREE Seminars - Schedule for April

April 14th (Saturday) - "Eliminate Chaos...In Your Home & Life" - Home Expo, Tacoma

Please visit our website for more information on each event.

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Media Coverage - Family Circle

On page 52 of the April Issue of Family Circle, you will find some tips on "What to Keep, What to Trash" as it relates to papers.

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Give the Gift of Organization for Mother's Day

Mother's Day is just around the corner.  Treat your mom to a gift of organizing for her closet, kitchen or office.  Don't give her any more "stuff" she doesn't need or want.  Gift Certificates make a great gift - enable those you love to take control of their time, their space and their stuff.  Contact our office for pricing. 425.670.2551

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 Best Regards - and Happy Organizing,

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  • Business Services
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  • "I have been using your services for many years now. It is because of your professionalism, efficiency and respect for your client, that I come back. You do not judge and you understand the emotion with organizing. Thank you so much for helping to make my lift a little more organized! "
    -T.T., Seattle .

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new client special smA great way to try us out and get some organizing done at the same time! For a limited time, we are offering an amazing NEW client organizing special. If you are not an existing client this is a great way for us show you how we can eliminate your chaos.

Call 425-670-2551 and ask us for details.

 
  • Business Services
    • Paper Flow and Information Management
    • Workspace Organization and Space Planning
    • Productivity Assessments
    • Microsoft Business Contact Manager
    • Microsoft Exchange Migrations
  • Visit our business services site