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Monthly bill organizers ease procrastination at tax time

Tue., March 23, 2010

This is the time of the year we gather documents to file our taxes. If you are like the rest of us, the exercise is a chore. Some people would rather have a root canal than pull together all those statements and receipts.

Whether you do your own taxes or use a professional preparer, it’s up to you to gather the data.

Now is the time you can implement a new organizational system to make next year easier at tax time. Here are some strategies I use that may help you organize your financial life and make tax time a breeze.

Monthly bill organizer: I use a yearly accordion file that lists all the months of the year. After I pay my bills, I put them in the tab corresponding to the month of the bill. When I gather my tax information, many times I need to refer back to a bill. The accordion file makes locating the document easy. It also keeps me on task when I am paying bills. In the back of the organizer I put documents, such as property tax statements, I’ll need for my taxes. This is the same system my husband uses when it is his year to pay monthly bills.

End of year statements: You most likely get a lot of statements all year long from your investment accounts. The most important statement worth keeping is the year-end statement that will summarize all your activity for the year. These statements usually have purchase and selling information on the positions. When I get my year-end statements, I put them in a file so I can refer to them when I consolidate the tax information. The older statements, I usually shred, keeping my year-end statements for my permanent records. Remember, your financial institution will keep these documents for seven years as well.

Tax documents: These are the statements sent in January and February. On the envelopes there is usually some wording indicating they are for your tax documentation. You need to keep your W-2 and 1099, K-1 and other year-end documents. I usually put those in a file to keep them for filling out those taxes. Again, I put these statements in my designated tax area so I am prepared to consolidate the data.

Those are the three simple steps to gathering your tax information. If you use this system, next year at tax time you will go to the three data places: your accordion file of bills, your year-end statements file, and your tax document file.

Pulling together this information does not need to be time consuming or difficult. And it won’t be if you take the time along the way and have places to place your data.

Sarah Rieger is a certified financial planner and member of the local Financial Planning Association chapter. Readers are invited to submit questions on financial planning to be answered in this space each Tuesday. Send questions to

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