Out of Chaos an organizing newsletter
The Transition
Now is the time to start thinking about your 2002-2003 transition. Here are some steps you may want to take:
– Gather the information you will need for 2002 taxes in one place. (Client tip: Pamela Miles always starts a new check register at the beginning of the new year- this way the old one can be filed with the previous years taxes—Excellent Idea!) – Purge any paid bills that are neither tax deductible nor “major purchases” (ie: cable bills vs. stereo or computer receipts.)
– If you don’t have too many papers to save you may want to re-label 2002 files without a year and simply keep all 2002 papers in a manila envelope or small accordion file. This way you will be able to re-use your files from year to year.
– If you have a business you may need a file box or boxes for the 2002 information, but usually an envelope will suffice. Generally you can keep the last 7 years’ tax files and then throw out the oldest (everything but the return) each year when you add the previous year. Check with your accountant before you start pitching. (Personally, I’m fond of transparent-colored plastic envelopes, they are durable and the colors make them easy to identify.)
– As you go through files concentrate on throwing away anything that you can. If you haven’t touched a file in over a year- then you probably don’t need that file.
– This can also be a good time to reconfigure files. Do you have several files with only one piece of paper? Often these could be merged, for example: COMPUTER, PRINTER and SCANNER files might all have manuals that could go together under: MANUALS while the receipts would go into your permanent MAJOR PURCHASES file.
– The end of the year is also a good time to reconsider what is and what is not working in your system.
– Do you have an effective system for receipts? I use a divided plastic envelope with sections for: MEDICAL, OFFICE SUPPLIES, TRANSPORTATION and so on. However, several of you prefer to throw all of your receipts into a single drawer or bag. Clearly this is more work at tax time, but if ain’t broke…