During the year:
I have one big file called Taxes 2013. If I write a check to charity I write it on the inside folder with the date and put the receipt in the folder. If I have a medical expense, I write it on the insider folder and put the receipt in the folder. When my homeowner's dec page comes in, it goes in the tax folder. Any tax item goes in the folder.
I run all my expenses through a bank account and a credit card. They both send me a statement at the end of the year with the whole year's expenses listed by category. I take a highlighter to the relevant tax items and file it in the tax folder. I order a prescription summary from CVS and put it in the folder.
My hubby keeps a separate file folder for rent house repairs and purchases and income.
Next year, I am balancing my bank account and credit card with Quicken so I don't even have go back through my year end statements.
When the W-2, mortgage 1098s and 1099s come in at end of year, they go in the folder. At tax time:
I group them...Income Items/Expense Items. I clip the W-2s and 1099 div/interest income items to the left side of the folder.
Inside the folder goes the expenses in the following order:
I put all our rental income/expenses together. Then I put any itemized deduction expenses together. Lastly, I have daycare receipts, homeowner's dec page, and LA Start contributions.
That's how I turn the sucker in and I still have to chase some document down before its over. When taxes are done:
I file all supporting docs with the copy
of the return sorted by year. I've kept every year since we've had a rental because I just know I'm going to need to pull all those one day when we sell.
This post was edited on 3/26 at 2:58 pm