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Banish the Tax Prep Terror

 
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Dołączył: 08 Sty 2011
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PostWysłany: Pon 6:35, 17 Sty 2011    Temat postu: Banish the Tax Prep Terror

,[link widoczny dla zalogowanych]
For those of us who are extra cautious and prefer a paper system in addition to an electronic document control, we will be delighted with this system of organizing paper. Let me introduce you to a self-purging, maintenance-free filing kit for the 20% of papers that are referenced. The pre-printed colored labels with additional blanks for personalizing the system are used on the tabs of hanging folders (letter or legal size). No more interior manila folders are needed unless you choose to subdivide a category further.
At tax time, collect the section of tax folders from last year (in this case the “even year” � 2010 folders), complete your tax forms using the documents saved or give them to your tax preparer. When the preparation is finished, staple the supporting documents by category and place the “even year” folders back into the system empty. File the completed tax forms and supporting documents stapled by category in the archived section of the system labeled tax year 00 to tax year 09. When placing 2010’s completed return into tax year 00,[link widoczny dla zalogowanych], the tax return copy with supporting documents for 2000 are removed and destroyed or filed in a box placed in long-term storage if there is an ongoing dispute or unresolved issues.
Don’t let paper management bog you down. Simple filing all during the year with a system will save innumerable hours at the end of the year.
Paperwork that is “semi-permanent” or can change periodically is filed in the remove/replace section. Insurance policies for home, auto, health, life or the contracts with service providers, employment packages, legal paperwork,[link widoczny dla zalogowanych], and membership lists for associations, clubs or religious institutions are all placed in this section. Receipts from service providers or for payment of premiums and dues are placed in the monthly or tax-related sections.
According to the SBA (Small Business Administration),[link widoczny dla zalogowanych], “time spent mishandling paperwork detracts from the company's ability to service customers, increase sales and improve the bottom line. 80% of papers that are filed are never referenced again. Rent of the space the file cabinets occupy, the file cabinets themselves, and filing supplies all cost money”. In the home, those stored bags or boxes of paper and cluttered, mislabeled files take up valuable real estate and add to the stress of retrieving needed information.
Additional labels are prepared for standard deductions (medical expenses, charitable donations,[link widoczny dla zalogowanych], income/W2/1099/K-1s,[link widoczny dla zalogowanych],[link widoczny dla zalogowanych], etc.). If you rely on account statements to prepare taxes there are labels for bank statements and credit card statements again duplicated for the even/odd year system. The home-based business or small business owner has the luxury of other labels that allow for filing business related statements,[link widoczny dla zalogowanych], rent/royalties,[link widoczny dla zalogowanych], unreimbursed employee expenses,[link widoczny dla zalogowanych], and business income. If a software program is used to categorize expenses, then you may wish to file this paperwork by month or vendor A-Z format. All are provided in the kit. Expense labels are provided that will mimic the bookkeeping system and the line items in the tax return.
January is the month to celebrate the “Get Organized” month sponsored by the National Association of Professional Organizers and to put your New Year’s Resolutions to be better organized into place. IF you haven’t implemented that New Year’s resolution, then perhaps your worst nightmare is about to happen.
The images can be printed should an item need to be returned and a receipt required. This program selects all the expenses marked as tax deductible and creates a tax report in seconds. The software integrates with all the major financial packages with which you are familiar. Two versions of this product are offered; one for individual users and businesses with 5 or fewer employees and a separate version for businesses with 6 or more employees allowing for a business-specific and integrated expense reporting system.
Control of articles we’d like to read or brochures collected from our travels and the notes we took at the last convention are handled in the resource section. It acts like your home library. The only word of caution here is to place only items that cannot be found at another source,[link widoczny dla zalogowanych], i.e. the internet, in the files and review the files annually to remove out-dated or uninteresting information.
The final section of the system is perhaps the most important in our daily lives. The “active” section can be placed either in a desk-top organizer or in an easy to reach desk file drawer. Items can be filed by the date you plan to take action (Day 1-7,[link widoczny dla zalogowanych], 8-15, etc.) or by the category such as “bills to pay”, “reconcile (receipts)” and so on. This becomes your “brains” for the day. Always start your day and end your day with preparation for tomorrow in this section.
Visit [link widoczny dla zalogowanych] to see the entire system set up in a file drawer. More information or ordering can be found by visiting [link widoczny dla zalogowanych] Affiliate’s page.
Now back to taming the tax terror…for those who prefer electronic methods, there are several aids out there that will help you prepare taxes as quickly as the paper filing kit discussed above. NeatReceipts? is a small desk top scanner with software. It can read and extract key data from receipts, invoices and other financial documents, including the date, amount,[link widoczny dla zalogowanych], payment type,[link widoczny dla zalogowanych], vendor and more. The IRS accepts these scanned images because they cannot be altered once scanned…no more shoe boxes of paper receipts to the IRS agent should you be audited. Many use it for business cards to establish mailing lists or your own personal electronic “rolodex”. There are versions available to work with most Windows programs as well as Vista and the data can be exported to most financial management packages, mobile devices, Microsoft Outlook? or Act!? database programs.
Business owners and individuals alike scramble about this time of year performing the proverbial search for those receipts, forms,[link widoczny dla zalogowanych], letters, paid bills,[link widoczny dla zalogowanych], statements…all the necessary evils to complete their tax preparations. What do you suppose it would be like to wake up January 1 knowing that you could have your preparations done in less than 15 minutes? Filing away papers throughout the week, month, and year into a system that is self-purging and designed to work by the paper’s function rather than its title, will help you be that person.
With this system, routine filing done on a regular basis can be completed in five seconds or less with retrieval of items 20 times faster than regular filing systems. The guess work of when to dispose of papers is taken out of the process AND there is a special section geared toward tax preparation. The system has been used for individuals and can be adapted for small companies with complicated filing needs.
A duplicate set of labels is established…one for even year and one for odd year. For example, you would be filing now in the set labeled even year for 2010 but last year’s information is stored in the files labeled odd year for 2009 paperwork. If deductions are few,[link widoczny dla zalogowanych], only one file is needed labeled “Tax Documents” (even/odd year).
Although not tax-related, you may have an interest in the other sections of this system. Paper management issues like receipts not related to taxes are filed on a monthly basis and discarded at the end of the year. That receipt could also be placed with a manual for the product and filed in the special permanent section under “warranties & manuals” if needed for a warranty/replacement problem. The permanent section is also where you find education records, medical records, auto/home records,[link widoczny dla zalogowanych], and certificates to name a few.


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