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Organizing Tax Papers & Income Tax Cocktail

Organizing Tax Papers Step-by-Step & the Income Tax Cocktail

Need some tips for organizing your tax paperwork?

Tax season is here…soon your mailbox will be filled with W-2’s and 1099’s. Or you’ll be hunting down mortgage deductions, student loan deductions, or child care provider tax IDs. I want to give you an easy, paper organizing system that can help you organize your tax paperwork for this year and years to come.

I’ve even created a checklist to make gathering what you need for a tax box and putting it together easier. To grab your free worksheet, just click below.

Just a quick note…this episode is all about organizing your tax papers. For specifics on what you should keep, please consult your tax preparer, attorney or accountant.

WHAT YOU’LL NEED

The first thing I recommend is to pick some sort of vessel to contain your tax paperwork. What size container you need depends on how much space you need. It could be anything from a file wallet with little tabs for each one of the categories to a file box to put file folders or hanging folders in. You could even use something like a plastic shoebox with envelopes inside if you don’t have a ton of documents that you collect throughout the year. Since all those documents are rolling in right about now, take a look at what you’ve collected this year and determine how big of a container you need for your items.

Second, you want to pick a place to put your tax collection vessel that will be almost in your way. Because you can’t justify not putting the receipts or documents into the right place when you have them in your hand. It’s very easy to lose these pieces of documentation especially in the Summer or Fall when you aren’t exactly thinking “it’s tax season.” And it can be a headache to try to track them down when you go to do your taxes the following year. Make it as easy as possible for you to drop the charitable contribution letter, thrift store receipts, real estate tax statements, and so on.

CATEGORIES FOR ORGANIZING TAX PAPERS

I developed these five categories based on the basic needs for myself and most of my clients.  You may add more to this, but in most cases, these standard five categories will work.

  • Income
    • Any documentation or receipts of money that comes into the house that you need to pay taxes on would go into the income section. Whether it’s from your job or alimony or lottery winnings or babysitting or dog walking or investment dividends.
  • Donations
    • This section is for documentation of money that you give to a charity in the form of cash or check. Also, receipts for any in-kind donations that you make to places like the Goodwill or the Salvation Army or Veterans of America. Create an itemized and valuated receipt when you drop off those donations, especially if you’re a homeowner, because those donations are tax deductions.
  • Medical Expenses
    • This is where any of the doctors or medical bills that you paid throughout the year. Or receipts from your copay would go into this category if you are able to write off your medical expenses as a tax deduction.
  • Taxes Paid
    • This section is where you put the receipt of taxes you’ve paid. If you’ve paid real estate taxes or buisness taxes, put the receipt here. This is also where you would put the receipt or record if you made a pre-payment the previous year for this year’s taxes.
  • Miscellaneous
    • Anything that doesn’t fit in those first four categories goes here. Think student loan interest documentation or childcare deduction information (your sitter or providers’ tax id). As you start to pull together your documentation from this past year, think of anything you need but that only has a few pieces of paper as documentation. Those are the things you’d put in this “miscellaneous file”.

THE INCOME TAX COCKTAIL

From The Kitchen

Serves 1

  • 1 1/2 ounces gin
  • 1/4 ounce dry vermouth
  • 1/4 ounce sweet vermouth
  • 1 ounce orange juice
  • 1 dash Angostura bitters
  • Optional garnish: orange twist

Combine all ingredients in a cocktail shaker with ice. Shake vigorously. Strain into a cocktail glass. Garnish with an orange twist.


New episodes of “Cocktails and Containers” are available every week.

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You can find past episodes “Cocktails and Containers” here.

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