Tag Archives: taxes

These 3 Types of Paper Are Clogging Your Files

If you’re still getting these in paper form they are likely clogging up your filing system … or creating piles!

Pay stubs – They are informational only.  When you get your pay stub each period, check it over to make sure your vacation, sick balance and other deductions are accurate. If all is okay, you don’t need to keep it. Your W-2 form at the end of the year is the only record to keep for taxes. If you need written evidence of accrued benefits, keep your last pay stub of the year. That would have your year-to-date accumulations. If you get electronic paystubs, then for sure, shred the archived ones from long ago.

Expired insurance policies – once the term is over, the policy isn’t valid.  Having a claim or loss in the previous period, might justify keeping it. But most folks don’t have this issue and old policy statements can be tossed (shredded) when they expire. You’ll be surprised how many years back these bulky documents go. Hit all the categories – auto, home, life, umbrella, etc.

Monthly investment statements and activity confirmation statements. Once you receive the quarterly or annual statement, these documents are redundant.

 

BONUS! Banks and credit companies CYA privacy policies and term sheets. Have you ever had to refer to these in the lifetime of your credit card or account? They could trigger you to update your privacy settings with the institution (online or in writing) but if you know you will never get around to it, just let them go.  All these are available online.

Give yourself the gift of a clear desk or roomy files by removing things that just make you feel unsure and guilty. If you truly can’t imagine letting these items go, get them in a box (labeled, with a “date to destroy” in a reasonable amount of time) and store them far away from your active work space.

Advertisements

Leave a comment

Filed under home organizing, Office, Paper, paper organizing

The Best Wedding Gift Ever

Your child is getting married or graduating or having a baby…what is the most thoughtful gift you could give them that would last a lifetime? A filing system!

Now, a filing system may sound like the most boring, uninspired gift you could possibly give someone but bear with us while we explain…

A good basic filing system is an essential part of an organized life. Despite the promises of a paperless world, we constantly see people overwhelmed and confused by piles of paper in their homes. Often the problem starts at one of these of these major life events where suddenly the amount and types of paper coming in multiplies exponentially.

For a new graduate, having a central place to manage personal records, job history, and tax documents starts to teach them about leading an adult life.

For couples getting married, having a central place where all important insurance, ownership, certificates, account & tax documents are kept minimizes stress and will help them manage a life that will become increasingly more complicated.

For new parents, having a central place to keep health records, school paperwork, parenting resources, and sports/camp info prevents the stress and inefficiency of searching the house for needed documents. Providing a dedicated box for memorabilia/artwork is a great addition to a filing system.

You can easily set up a basic system in a portable file box, small or large, using categories you create or a kit such as Freedom Filer. The box doesn’t have to be their permanent container; they may already have a filing cabinet or one may be needed once all their papers are gathered.

Basic categories include:

  • Career
  • Health
  • Insurance
  • Finances
  • Personal
  • Resources
  • Vital Documents (passport, birth certificate, marriage certificate, etc.)
  • Taxes

Give your loved ones a head start on the challenges of paper management. A gift certificate to a professional organizer to help them integrate their papers into the system and further customize would be icing on the cake!

Leave a comment

Filed under Decluttering, Empty Nest, Paper, paper organizing, Products, professional organizer, School, Storage, Strategies, Wedding

Even Organizers Need An Organizer Sometimes

Katherine tells the story of her home office…

I wanted to turn my grown daughter’s abandoned room into a full-fledged office but I all I had was a piecemeal of cabinets and desktops.  To get a more professional feel, I figured I’d need to have my desk and countertop custom built.

My first step was to have a contractor come and help me figure out the best configuration and give me a bid.  I had heard great things about Bay Home & Window so I made an appointment.  Their designer, Jeff Johnson came to my home and gave me a plan that was way better than I had imagined!  It seemed pricey compared to my makeshift set-up, but I loved the design. I stalled on purchasing the new office furniture and I wasn’t sure why.

As it turns out, I was stuck because I didn’t know what my needs were until I got really organized. That’s when I brought in my professional organizer colleague.

What were my goals?

  1. I wanted to create a custom built-in desk and file system suited to the way I work
  2. I like lots of open desktop space to work on projects and wanted easy access to the information I need every day
  3. My receipts system was inadequate…too much paper stuffed into my receipts drawer
  4. I wanted to streamline tax preparation

What got accomplished that I wouldn’t have done on my own?

  1. I spent time sorting through the little bits in my drawers that I wouldn’t have wanted to spend time doing…it was tedious, but getting it done helped clear the logjam
  2. I made paper files that mirrored my tax categories in my financial software program – Schedule C and business use of home categories
  3. I purged many files from past conferences and trainings and archived many others

How long did it take?

I went through 8 file drawers, 1 receipts drawer and 2 supplies drawers – purging old docs, refreshing file labels and creating new files from the homeless pieces of paper I found in and around my desk.  It took about 4 hours.

Accomplishments:

  • I was able to pare down my files and supplies stored from 8 to 6 drawers, saving me from having to purchase another file cabinet (at least $300)
  • My active client and project files got moved up to desk level to enable easy access
  • Clearing out unnecessary paper and gathering my miscellanous notes into a system helped me feel less burdened by my “To-Do’s”

 

a more organized office

a more organized office

I didn’t expect to feel such a powerful sense of relief from dealing with that drawer of miscellaneous bits.  I never thought it would be worth my time.  I look in my drawer and there is a sense of clarity and …dare I say…HAPPINESS? that what I truly need and use is right there, at my fingertips!

I am now able to confidently move forward with a built-in desk system that works for me…without over-building (and over-paying.)  I’ll keep you posted on the progress!

Leave a comment

Filed under General Organizing, Office, Paper

Organize Home Receipts Now For Big Bucks Later

plans

Don’t just save the plans after a remodel – save receipts too!

Sheila is 85 years old and has decided to downsize into a retirement community. Her house is worth a whole lot more than what she paid for it 60 years ago. Let’s say she paid $25K and is able to sell the house for $625K. That means she may have to pay taxes on as much as $600K profit – or gain (minus a $250K exclusion the IRS grants).

Sheila’s accountant tells her she could pay significantly less taxes because she can add the costs of various improvements she made over the years of ownership to the base amount she paid for the house. This is called increasing the cost basis of the home. But where is the documentation?

This is where being organized comes in handy. With a simple system, homeowners can preserve the records of improvements they have made to their property. When the house sells and the accountant is asking for ways to reduce your tax burden, the seller can produce the receipts and records which could save them thousands. Selling the family home and moving is stressful enough without adding last minute scramble to dig up old documentation.

The simplest system is a single file drawer or filing tub to hold all the purchase and improvement related documents. From there you can get more organized if you desire by separating different types of documents into different folders. If you’re planning a full remodel or major improvement it is helpful to keep all the permits, contracts, inspections, receipts and invoices together labeled by the name of the project.

Here is specific info from the IRS’s publication, Pub 523 – Selling Your Home, which outlines what qualifies as a cost basis improvement

Improvements

These add to the value of your home, prolong its useful life, or adapt it to new uses. You add the cost of additions and improvements to the basis of your property.

The following chart lists some examples of improvements.

home improvements chart

Repairs done as part of larger project.   You can include repair-type work if it is done as part of an extensive remodeling or restoration job. For example, replacing broken windowpanes is a repair, but replacing the same window as part of a project of replacing all the windows in your home counts as an improvement.

Examples of improvements you CANNOT include in your basis.

  • Any costs of repairs or maintenance that are necessary to keeping your home in good condition but do not add to its value or prolong its life. Examples include painting (interior or exterior), fixing leaks, filling holes or cracks, or replacing broken hardware.
  • Any costs of any improvements that are no longer part of your home (for example, wall-to-wall carpeting that you installed but later replaced).
  • Any costs of any improvements whose life expectancy, when installed, was less than 1 year.

Exception.   The entire job is considered an improvement if items that would otherwise be considered repairs are done as part of an extensive remodeling or restoration of your home. For example, if you have a casualty and your home is damaged, increase your basis by the amount you spend on repairs that restore the property to its pre-casualty condition.

Obviously everyone’s tax situation is unique and there are other variables that can affect the picture, even year-to-year. We are simplifying for the point of illustration.

So no matter when you bought your home, now is the time to gather up all the house related receipts and start keeping any original improvement receipts. If you neglected to keep them, at least make a list of known improvements and try to estimate what you spent.

Did you find this article helpful? Let us know!

1 Comment

Filed under Decluttering, Moving, Paper, Seniors, Strategies, Technology

A Place for Everything … The Power of One

 

power of one - 1 (1)

A place for everything and everything in it’s place…the adage does make for an organized … and neat … house. Sometimes it’s more important to create a quick and simple place to put certain items and less important where or what that place looks like. Here are 5 things where having a dedicated home will instantly reduce clutter and stress.

Tax Related Papers

Charitable deductions, deductible receipts, tax forms such as 1099s, W-2’s, K-1’s….No matter how simple or complicated your tax life is, understand what you need to fill out that tax planner or what needs to be in the pile to hand over to your accountant. Having it all in one place reduces tax prep to a few hours instead of days or weeks.

Election Material

During election season, we get inundated with marketing flyers for different propositions and measures. Create a spot where they can easily be collected then review at your leisure to eliminate duplicates and to compare who is endorsing what.

Summer Camp/Vacation Planning

Resources and ideas on these flow in all year but often heaviest in Feb/Mar. Being able to quickly put your hands on the latest flyer (or the one from last year that you opted out of but want to revisit) helps streamline schedule planning and decision making.

Memorabilia

Nothing creates clutter quite like keepsake items sprinkled liberally on surfaces throughout the house. Pick a few choice drawings/photos/objects to have on display and create a keepsake box for each member of the family. That way when the next trinket or tidbit that reminds you of a special time flows in you can unite it with its friends in the keepsake box. Generally we recommend keeping photos in separate boxes from keepsake items.

Calendar

Keeping dates in multiple places is a recipe for missed appointments and lots of stress. Pick one method – wall calendar, purse planner, iCal, Google Calendar, etc. and stick to it.

But what about digital?

How do you manage if some of the information is digital and some in paper? The same concept applies – use a named folder to gather specific items and keep digital files in one place. Using cloud-based storage such as Google drive or Dropbox give you access from any device. Also software such as Evernote make it easy to collect websites, notes, photos all in one “notebook”.

Have a questions about how to make this happen in your house? Ask it here, we’ll answer!

Leave a comment

Filed under Decluttering, General Organizing, organizing, Paper, Perspective, Strategies

Get Organized for Tax Time

Are you ready?

Are you ready?

Have you broken out in your usual sweat anticipating tax time? Do you find yourself dreading the hours it’s going to take to round up the papers you’ll need to complete your tax planner? Being ready for tax time is all about having a system for keeping certain paperwork separate from others.

The most simple way to keep your tax paperwork separate from other papers is to create a box or file labeled “TAXES.”  If you want to get fancy, subdivide to create homes for:

  • charitable donations
  • childcare expenses
  • medical expenses
  • proof of income: W-2s, 1099s
  • tax documents

The home can be a file folder, envelope, or even a dedicated box. Anything that is easy to drop things into throughout the year.

If you’re keeping every single receipt and account statement, it’s worth asking your tax preparer to give you a list of documents you actually need to keep. Typically these are only receipts and statements that prove expenses you claim as deductions on your taxes.

For paper organizing, it’s important to understand the difference between a general living expense and an expense you can claim as a tax deduction. For example, gas station receipts are a general expense, but if you use your car for business they could become a tax-deductible expense. There may be other reasons you want to keep every gas receipt – budgeting, MPG tracking, etc. but you may not need them for taxes.

If you are self-employed and unsure what’s deductible, consider this Oakland tax workshop hosted in February by Enrolled Agent and author Jan Zobel. The workshop covers:

  • Which expenses are deductible and what proof you need to have
  • How to make quarterly estimated tax payments
  • Ways to reduce your chances of being audited
  • How to set up a simple recordkeeping system
  • What additional taxes self-employed people pay
  • How tax law changes will affect your return

If you want to take your financial organizing to the next level, consider the following:

  • Use a money management tool such as Mint.com or Quicken® to categorize your expenses automatically so you just need to run a report at the end of the year (still need to keep your original deductible receipts)
  • Use FreedomFiler® to manage your filing
  • Have a professional organizer or bookkeeper come in and triage your 2015 taxes–and having help come monthly or quarterly will help keep things straight

 If it’s too overwhelming to get a system together for 2015, begin now with categories  for 2016!

Leave a comment

Filed under Decluttering, General Organizing, Office, Paper

Taxes Made Simple

Are you ready?

Are you ready?

Have you broken out in your usual sweat anticipating tax time? Do you find yourself dreading the hours it’s going to take to round up the papers you’ll need to complete your tax planner? Being ready for tax time is all about keeping certain paperwork separate from others.

The most simple way to keep your tax paperwork separate from other papers is to create a box or file labeled “TAXES.”  If you want to get fancy, subdivide to create homes for:

  • charitable donations
  • childcare expenses
  • medical expenses
  • proof of income: W-2s, 1099s
  • tax documents

The home can be a file folder, envelope, or even a dedicated box. Anything that is easy to drop things into throughout the year.

If you’re keeping every single receipt and account statement, it’s worth asking your tax preparer to give you a list of documents you actually need to keep. Typically these are receipts and statements that prove expenses you claim as deductions on your taxes.

For paper organizing, it’s important to understand the difference between a general living expense and an expense you can claim as a tax deduction. For example, gas station receipts are a general expense, but if you use your car for business they could become a tax-deductible expense. There may be other reasons you want to keep every gas receipt – budgeting, MPG tracking, etc. but you may not need them for taxes.

If you want to take your organizing to the next level, consider the following:

  • Use a money management tool such as Mint.com or Quicken® to categorize your expenses automatically so you just need to run a report at the end of the year (still need to keep your original deductible receipts)
  • Use FreedomFiler® to manage your filing
  • Have a professional organizer or bookkeeper come in monthly or quarterly to keep things straight

 If you can’t get it together for 2014, now is the time to set up a system for 2015!

Leave a comment

Filed under Decluttering, General Organizing, Office, Paper