With April 15th looming in the horizon, now is the perfect time to implement our bill organizing system.  This way all your bills and receipts can be retrieved easily for tax calculation.  Not to mention how much easier it will be to find that Target receipt when you have a return to make.

Our organizing tool is the Expanding File Folder.  These handy folders are perfect for easy filing and retrieval of all your bills, notices and receipts.  I like the ones that have 31 pockets but you can use them with less depending on the make up of your files.  They can be purchased at your local office supply store or by clicking below.

Buy separate files for different categories of bills.  I have one file for household bills, one for medical, one for permanent information (like insurance and automobile info), and one for stock information.  

Once you have your expanding files, take a Sharpie and label each divider with the names of each company that you regularly pay bills to.  Use a different color for categories that are deductible.  You can put two vendors per pocket by labeling the left and right side of the divider.

Then add specific categories for receipts or purchases you don't have credit cards or regular bills for, but often spend money on. (i.e. Target, books, magazine subscriptions, toys, etc).  This will allow you to find receipts quickly when you have a return or a dispute.  Don't forget to make pockets for your bank accounts, pay stubs, donations and tax information.

One you have implemented this filing system, year-end tax filing is a snap.  First pull your receipts for deductible items, which have been labeled in a different color.  Next pull your donation receipts and tax information (W-2's, 1040's etc). Refer to your other file folders for any other information needed (real estate purchase papers, insurance information, etc).  You're now ready to fill out your tax return or haul it all off to your accountant.

We've supplied you with a list of common categories below.  Use ours and/or add your own to fit your unique household.

It may seem like a big task at first, but next year when you see how much easier it makes filing your taxes, you'll never throw your receipts into that drawer again.  April 15th, 2006... here we come!

  

EXPANDING FILE CATEGORY EXAMPLES

EXPANDING FILE #1 - HOUSEHOLD BILLS
This file holds all your household expenses by the year.  At the end of each year file entire file, sans tax information, in a bankers box labeled with the year of its contents.

VISA
MC
AMEX
Water and Power
Gas
Phone
FAX
Cell Phone
Satellite
Cable
Department Stores
Pool Man
Gardner
Alarm Company
Newspaper
Toys
Magazine Subscriptions
Books and Magazine purchases
Movies and Theater
School
Temple or Church
Gasoline
Postage
Bank Statements
Pay stubs
Legal
Accountant
Taxes
Donations
Frequent Flyer Accounts


FILE #2 - MEDICAL
This file holds all your medical and dental records.  Match up medical bills to claims before filing.

Medical (one pocket for each doctor)
Dental (one pocket for each dentist)
Medical Claims
Dental Claims


FILE #3 - PERMANENT FILE
This file holds information you will hold onto for
a long time if not permanently.

Property Taxes
Home Mortgage
Equity Loan
Homeowners Insurance policy
Home Purchase Information
Earthquake Insurance policy
Improvements to House
Auto Insurance policy
Auto Purchase or Lease information
Auto Loan Payments
Auto repair receipts (from check-ups and any repairs)
DMV records
Miscellaneous Permits (i.e. Alarm)
Other Loan Documents
Social Security Statements
Life Insurance
Associations or Guild paperwork
Perm File (i.e. museum membership info, credit card info, etc.)


FILE #4 - STOCKS AND BONDS
This file holds all records of your stock and bond purchases.
If you are a day trader or purchase your own stocks and bonds I'd keep a log of each stock you bought or sold and log the purchase and sale price.

Brokerage Statements (one divider for each account)
Treasury Bills records
Certificates of Deposit records


                                                        
                      


STUFF YOU MAY NEED



31 Pocket Expanding File

21 Pocket Expanding File

Different information needs to be kept for different periods of time according to the IRS.  Check out our article next week entitled
" I have to keep it how long? for a complete guide on what to save and what to toss.