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Tax season is upon us, today I gave away four gift cards for TurboTax Deluxe to four of my readers and that got me thinking about my own taxes. How organized are you for your current, and prior, years tax returns. The 1099’s, 1098’s, W2’s and everything else should be trickling in by now and you need to have a system in place to keep track of these extremely important documents. I refinanced this year so I have gotten 3 1098’s for mortgage interest paid, both my wife and I work so that is 2 W2’s, we have IRA’s, 401k’s, blogging income, and kids. All of these things relate to taxes and all of the documents need to be in order and accessible to complete my return.

How I Do It

The system I have developed is a fairly simple hanging file folder with separate manila folders for each tax year. On the outside of the manila folder you should write down each of the interest earning banks, mortgage companies, affiliate marketers, and  investment accounts that owe you some type of tax related document. As each document comes in you place it in the folder and check off that you received the document. This way you know what is still outstanding and what has been received. All of your documentation is in one easy to find location and you don’t have to worry about tearing the house apart later to find it or wondering what you still need to file.

Why It is Important

Organization is important for everything you do in life but especially for your taxes. Keeping everything together will make it easy for you to jump online and complete your tax return in no time flat. Once you complete your return everything is easily returned to the file and kept until it is no longer needed. If you came into my home right now and asked me for my 2006 tax return and supporting documentation I could whip it out for you in less than 1 minute, could you do the same thing? The IRS probably isn’t going to wait around for you to reproduce copies of things you should already have so get organized now while you have the time.

Don’t Cheat the System

I know there are people out there who think, hey they didn’t send me a 1099M so I don’t have to claim that income, WRONG! If you earned it you have to claim it, by keeping track of who owes you something you will know what didn’t come in. They don’t actually have to issue you a 1099M if you didn’t earn more than $600 during the year. That doesn’t make you any less accountable for your taxable burden. I made $400 in 2008 as a guide for the text service ChaCha I didn’t get a 1099 but I still claimed the income, my wife didn’t think I should. The fact of the matter is twofold, 1.) it is the honest thing to do don’t cheat the system 2.) if you get audited and the IRS discovers this “unclaimed” income you could be in a world of hurt after interest and fines are assessed. Just do what is right and claim everything you make regardless of if it is documented or not.

Additional Tax Resources

10 Oddball Tax Deductions

The 11 Most Overlooked Tax Deductions

TurboTax TaxCaster (forecast your return)

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One of the key pieces to getting your daily work accomplished is maintaining and organized workspace. Whether you work from home or work in the office being organized is crucial to maintaining a productive work environment. Your workspace not only says a lot about you but it has a direct effect on HOW you operate. I propose five steps to improve your productivity by improving your workspace.

1.) De-clutter your Workspace

Clutter is the antichrist of productivity. When your workspace is cluttered you wont’ feel organized and you mind itself will start to become cluttered. Every time you turn your head from your monitor you see the mess and the mess will eat at you as one of things you need to deal with but haven’t the time. As your mind becomes cluttered trying to keep up with where the important documents are in all the clutter your productivity will suffer.

Sit down today and make the change to de-clutter your workspace. Shred any uneccessary financial documents, stack up your documents that need to be filed, and recycle the rest. Remove anything from your desk that doesn’t specifically relate to your work, or doesn’t provide value to your work. Once your desk is clear set to work on your “to file” pile.

2.) File Efficiently

How you file your documents will make dealing with documents as they come in considerably more easy and efficient. I file all of my financial and work related documents by using a hanging folder for specific categories and manilla folders within those folders to subdivide the contents. For organizing my finances I use the following structure:

  • Taxes – holds all of the information related to my last 7 years of tax returns
  • House – hold mortgage and second mortgage statements and contracts
  • Insurance – Vehicle 1, Vehicle 2, boat, home, health, and life insurance
  • Debts – Credit Card 1, Credit Card 2, Student Loan, Other revolving debts
  • Investments – 401k, spouses 401k, IRA, and ROTH IRA
  • Cash Accounts – Savings 1, Savings 2, Savings 3, Checking
  • Social Security – Holds most recent social security statement for me and my spouse

3.) Eliminate Distractions

TV, Twitter, Facebook, and people are all distractions which vie for your time and keep you from accomplishing the task at hand. Unless you require a TV for your job, like monitoring markets and news for a trader, get it out of your office. You don’t need it and it provides no value to your work day. The next, less easy to get rid, problem is the Internet. You need to mentally prepare for your work day and tell yourself you aren’t going to tool around on the net today. Commit to avoiding it, or only allow you self a certain amount of time to tool around. Following the Internet people are your biggest distraction.

If you work from home you need to ensure you are properly isolated from children and spouses who may be in the home during your working hours. If you have doors close them and lock them so anyone trying to enter has to knock.

If you work in the office in a cube farm it is much more difficult to avoid people. Try to tactfully tell your coworkers you are closed for business unless it is directly related to business. Idle chat, while good, is not good for your work productivity. Catch up on lunch but work during the day.

4.) Plan Your Day

Just like in a war you don’t want to go into battle without a plan. Your plan is how you want to attack your day. The plan could be as simple as a list of tasks to be completed or as complex as a gant chart outlining your project and milestones.

I prefer to use simple todo lists to manage my tasks for the day. As items come in that need to be completed I either do them immediately or add them to my list. In true GTD fashion I flag my todo items as follow up needed, or next action. When I have list of what needs to be done I am able to assess my productivity and ensure I don’t miss out on what needs to get accomplished. When you identify everything you need to do and lay it out in an organized fashion you will breathe more easily.

5.) De-clutter your Inbox

My inbox is the bane of my existence. It seems I am in a constant fight to keep it cleaned up and organized. For my day job I have instituted a system where I label my email as it comes in as one of four categories. It either requires action, is waiting on some else, is reference material, or needs to be deleted.

What I have done is setup search folders for each of the categories so the mail is added to the respective folder when ever I add a category to the message. My Next Action search folder contains all unlabeled mail, Mail marked as action required, and mail marked as waiting on. The other folders are used to identify mail for either archiving or deleting.

I try to maintain a similar structure in my gMail box by using labels but I fail most of the time to adequately filter those messages. What you want to reach is an inbox that only contains those items requiring you to take some action. If you label the mail as it comes in it should filter itself out to delete, reference, or action required depending on the category you assign it to. However you do it you want to be at a point where your inbox is empty and your mail has been categorized so you know what to do with it, what requires follow up, and what you are waiting for responses on.

This list is by no means an end all be all of organization for your office. I hope to have given you some groundwork to get your ship in order. I can assure you that if you take these five steps you will have better piece of mind about you work and will likely be more productive.

Photo: (Orphanjones)

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Not very many people have  a good solid system for organizing there important documents and financial papers. With it being tax season I thought it would be a good time to discuss some of the how’s and why’s of document organization.


Why Should you organize your documents:

  1. The biggest reason to organize your documents is so they are easily found in the event of you die unexpectedly.  Your loved ones are going to have enough to worry about in the aftermath of your death, they don’t need to be searching through piles of crap to find the documents they need.
  2. The taxman cometh, and he don’t mess around.  Having everything organized will make surviving an IRS Audit that much easier. Make sure you maintain your tax documents for at least 6 years, which according to the IRS, is the maximum length of time they have to audit your records.
  3. If it isn’t organized you don’t really know what you have, or what it is worth.

How I do it:

  1. I use hanging folders organized into: Tax documents, Household Accounts, Banking Accounts, Insurance, Retirement, Investments, Will, Business, and Liabilities.
  2. Within each folder I have regular folders with the account name which holds the detailed documents, so for instance my tax folder has individual folders for 2002-2008 taxes which each contain a copy of my return and all supporting documentation.

You should make sure that you have accounted for all of your major accounts and streams of income, put your statements and other documents into the folders. The most important thing you can do is to make sure everyone who needs to know, knows where the documents are located.  It doesn’t help to have a great system of organization if no one else will know how to find it. Do yourself and your family a favor and get organized.

Photo (aliwest44)

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