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Its that time again, tax time! It comes around every year, but no matter how much you try the paper work piles up and before you know it, another year has came and gone. So what can you do now to make tax time just a little simpler next year.

What can you claim?

Before you start organising your paper work its always a good idea to know what you can claim for tax purposes. If your not sure, discuss your circumstances with your accountant, or review your previous years return, to get an idea. This way you can keep an eye out and make sure you don't mistakenly throw those receipts in the trash.

Categories

The next step in this process is to work out what the main categories your paper work comes in. This will be the bases on where you will be filing everything and is important to be able to find documents easily.

Start with the following categories:
- income
- bank correspondence
- utilities
- tax deductions
- other

If you have a lot of paper work for a particular category, it is worth while splitting the category up further. For instance, if you have different sources of income such as investments, look at separating this correspondence from salary and wages you may receive.

Set the System Up

Now that you have an idea of the categories you will file your paper work into, its now time to set the system up. There are many ways you can do this, and is really a means of personal preference. For instance you could set up a folder or two, with dividers or tabs to identify each category. Alternatively, you could use a filing cabinet, or an expandable folder that is already divided up, making it just a matter of popping in your paper work as you receive it.

Once the year is complete, look at filing what you have in a storage box, or start a new folder to ensure that each tax year is filed separately. This way you can continue to file your paper work, even when your accountant may have your previous years information to prepare your tax return.

File it Now, Not Later

Like many tasks we dislike, it is much easier to tackle it a little at a time. If you have a simply system set up, it should be just as easy to file the your paper work as you receive it rather then just putting it in the dreaded pile of unfilled paper work. If you put in that little bit of extra effort now, you will reap the benefits when it comes to tax time.

Now that you have some ideas on how to best sort out your paper work, and make tax time easier next year, why not apply what you've read to that mess thats awaiting now. What a great way to fine tune your system for the coming year.

Learn more about this author, CE Wynn.
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