This time of year is the time to pull together tax records for our tax return. A few years ago, this step would have taken me hours to do, but now it takes very little time. I still have to summarize information and gather online receipts and bank information, but thanks to some planning, it is quite easy.
When we were first married, we did not have many records to worry about. Just our employment earnings statement and a few financial forms. But as the years went on and our family grew and we bought a home, incurred loan expense, and acquired financial assets, the need for an efficient filing system became apparent.
I set up files for the following categories:
- Real Estate
- Financial Institutions
- Child Car
- Business Receipts
I keep all my information in file folders and file the information when it comes in. Once I started this, it became easier to do and then it became a habit. By doing this soon after the expense occurs, I save a lot of time not having to pull all the information together from a big pile or box at the end of the year.
If I receive an online receipt, I file it in my email “receipt” folder. At this time of year, I print out the receipts from that folder (For more information on how I organize email, click here). I can then summarize these receipts as well.
I keep these files in a file cabinet. I keep hard copies of my tax information for the recommended retention period. At some point I would like to scan the information and purge the originals.
Depending on your situation and organizing preferences, you may be able to fit the information in an accordion file or file box. If you do not have a system in place, now is the perfect time to start one.
Do you have your tax information organized? How do you organize your records?