by Elizabeth Gilbert

Created on: February 11, 2009   Last Updated: February 16, 2009

Many people dread the coming of tax time each year. We all have good intentions but like our other New Year's resolutions time goes by and we slip back into the same old habits. So, here is a way to get last year's receipts in order and to get on track for next year's taxes before the stack of receipts has you buried or you bury them.

For last year's receipts you'll have to find all of them that are probably scattered hither and yon. Sort them into piles. Then take 5x8 brown envelopes, label each envelope as a category. Some of the common ones are gas, rent/mortgage, medical, car repairs, utilities, restaurants, etc. Next tally the receipts as you put them into that envelope. Write the total on the outside of the envelope.

Follow that process for each pile until all receipts are in one of the envelopes. If there are special receipts, that you aren't sure how to categorize, put them an envelope marked "miscellaneous envelope". Write a note on the outside so that receipt can be easily located. For instance, Heater/Air Conditioner Receipt - $4,000 might not fit any of your categories but would be useful for an energy credit. . When finished tallying all of the envelopes, put them together in a box marked as 2008 tax items.

Now it's time to get organized for this year. You're only one month behind so it will be easy to catch up. So this time get the 5x8 envelopes (larger if you need them) and label them ahead of time. You should have a good idea of what labels you need by what you did for your 2008 tax envelopes. Tape them to the inside of a cabinet door or put them in a location you can access without a hassle. Then as you get a receipt drop it in the envelope.

On January 1, 2009 take out the contents of each envelope and tally the contents. Write the total on the outside of that particular envelope. When finished tallying all of the envelopes put them together in a box marked as 2009 tax items.

It's much easier for you and your tax preparer when everything is sorted, tallied and visible at a glance. Tax time is not such a headache and you know exactly what to take with you to the tax preparer. It is also a good way to store them so they are readily available in the event of an audit.

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