The Paper Trail That’s Never Too Early to Organize
Guest post by Melly Sutherland, Retired, Former Manager at the University of California Humanities Research Institute
If you itemize deductions on your income tax return, rather than claiming a standard deduction, January is an ideal time to set up a method for organizing documents and receipts that you will need when you file your income tax return in April 2024. Even if you hire a tax accountant to prepare your taxes, by creating at this time a filing system for keeping deductible expenses in specific categories, you will save a great deal of time and frustration in April 2024. Use the system you choose year after year, and perfect it as you go along.
As you receive receipts, bills, and other records for deductible expenses such as charitable contributions or business use of your automobile, for example, file them in their specific categories. Keep them in their classifications in hanging files in your desk drawer, in an accordion file folder, or in your Sunday Basket®.
If you like to keep a record of your deductible expenses on a spread sheet, do keep the actual documents in an organized file as well and don’t throw them away. Store them for six years in case the IRS audits your return.
A list of deductible items may be found at https://www.irs.gov/credits-deductions-for-individuals (https://www.irs.gov/credits-deductions-for-individuals)
Do you use The Sunday Basket®? If so, you will want to store your receipts in a slash pocket until they are processed, at which point you could move them into a Financial Binder or Tax slash pocket for safe-keeping. I can send you an affiliate link if you would like to purchase this system. If you have it already, do you have further questions about this or need help setting it up? Contact Arrange For It to schedule a 1:1 session with a Certified The Sunday Basket® Organizer: firstname.lastname@example.org