Tax preparation made easy

At this time of year when taxes are due it always makes sense to review what changes we can implement to make the process easier for the upcoming year.  With the 2011 tax season drawing to a close you may want to review your paper system for 2012.  Were there documents you searched for?  Did you spend extra time compiling numbers you needed?  Even though a few of these tips are repeats from previous blogs they are worth looking at again:

-Whether you use a hanging file with interior folders, a divided tote or a binder with pockets, you should have one place where all your tax related paperwork goes throughout the year.  Keep the paperwork somewhat accessible so you can add documents as they arrive.  Leaving tax-related paper out to be filed at a later time can result in the documents never making it to the storage area. 

-While this list is not exhaustive, here are some sub-categories you could have and the documents within them.  If you run across another sub-category make a folder for it: “Charity” for any non profit donations you make, “Medical Expenses” for any health expenses you can claim, “Tax Documents”  for all end of the year statements (financial statements, 1099-HCs, 1099s, W2s, etc), “Income” for paystubs, rental income, prizes etc.

-If you do not have Quicken or Quickbooks it can be helpful to maintain a spreadsheet throughout the year.  As you incur an expense it can go on the spreadsheet in a specific category.  At the end of the year you will have the total number for each area and not wasted time reconciling receipts.  Examples of good expenses to track would be medical, education, mileage and travel etc. 

Of course all of the above are just guidelines and a basic structure.  Take some time to properly set up for 2012 and make it your own!

Technology doesn't always fix the problem

I met with a prospective client a few weeks ago to discuss the possibility of organizing her business office. During our initial consultation we talked about the problems she was facing with her desk and why it was always unkempt. At one point in the conversation our attention turned to the disorganization within her computer and why her computer files and emails were not being managed properly. It highlighted an often forgotten fact…Technology does not automatically make a person organized! In fact, sometimes it can make their situation worse. My prospect’s desk and computer were remarkably similar: her papers were all mixed up on the desk and so were her computer documents. Her physical filing system was not functioning properly, and she had not yet created a system for her computer files that was efficient and effective. In the end I believe that good habits and discipline make someone organized, not necessarily the technology they use. For some people, electronics and technology are a God send and make life easier. For others, it highlights and accentuates the current lack of organization.

Purchasing a good file cabinet

So you need a place to put all those papers. A filing cabinet is the obvious solution. But you want to get one that will last and fit your needs adequately. Take these points into consideration when you shop for a filing cabinet, whether it is for home or business use.

1) Do you want legal or regular width drawers? If you prefer legal size papers, buy a cabinet specifically meant for legal size files. Trying to transform a typical filing cabinet into a legal size one wastes a lot of valuable space.

2) Be sure the drawers run on tracks. If the drawers are free and simply slide out they will be difficult to move once they are fully loaded. Invest in a cabinet with drawers that run on sturdy tracks.

3) Be sure the drawers have high sides so you can use hanging files. If that is not possible, purchase an inexpensive rack to insert in the drawer. A filing cabinet becomes a black hole if manila folders are simply lined up in the bottom of the drawer.

4) Consider the material. The rule of thumb is sturdy. I thin metal file cabinet will buckle over time and a file cabinet made of low quality particle board will not last as long. Invest in a cabinet made of high quality materials to get the most life out of it.