Looking to April 2006

Hi neighbors. How many cups of coffee did it take you to get your tax forms filled out? It didn't take me many because I have my taxes done by a professional accountant. Unless we count the number of cups it took to get all the information ready for her. That was more than three! Thank goodness that's all over and done for another year.

I think April 15 is as universally a day for resolutions as January first is. How many of us determine that next year will be different. April 16 we decide we will keep a place for every little scrap of paper tax related and diligently keep them all filed as they cross our desk. Yeah, right.

Actually most of us do pretty good the first couple of months. We sometimes start early, even in January. Unfortunately, for those of us who start getting organized and meticulous with our bookkeeping in January, we are burnt out by May first. The stacks of receipts start to pile up or get scattered around again.

I don't know if this would break down into technical disorganization or simply procrastination. Either way, it makes for a difficult April the following year.

The most difficult part may be trying to figure out what to keep and what to throw away.

My Mom always said keep any thing that shows you've paid money out or got paid.

I've simplified things a bit. If a paper is related to my writing business, money in or out, I keep it.

If it is something that I've bought and it has a serial number, I keep the receipt with the users manual or any other paper work that came with it.

If the paper might be useful in determining an annual outlay of expense, I keep it and do the math at the end of the year to see how much the monthly averages were.

I keep maintenance records on my car and my house.

Any paperwork concerning long-term commitments or investments I keep for the duration of the specified time.

If you had a difficult time this year getting your records organized to do your taxes, maybe now is the time to plan ahead for next year.

Keep things simple. We all bring shopping receipts and mail in and throw them down. Get a box and label it then throw your receipts in the box instead of on the table or desk.

Set a time to go through the box and file what is to be kept and throw away what you will never need.

If you have questions about what you need to save, ask your tax accountant. You could also go to the Internal Revenue Service page on the Internet and find some tips there. Just do a search for "IRS" or "tax tips" and you'll find a wealth of information.

Set up some system at home or work that will make life easier for you next April. Trust me, an hour a month of filing and sorting through papers will save you a lot of worries later on.

If you have a computer, there are programs that help keep track of income and expenses. Of course, computer programs only have access to what you put into them so you do have to do some data entry now and then to get the most out of those programs.

Depending on your needs, you may not need to purchase a program as elaborate as some of the accounting programs out there. If you have a business, you need the program that best fulfills your accounting needs.

For household expenses a simple "cash flow" chart available on most computers with Windows programs will do just as well as the more expensive accounting programs. At the end of the year, these charts can be shortened into a report you can take to your accountant or use yourself.

Probably the most important thing to do (especially if you have someone else who does your taxes) is review the 2004 tax papers carefully. It's always a good thing to do this before you send them in, of course, but you might want to take some time now and go back over them. This will show you what information was needed to complete the tax forms.

You can see what deductions were itemized. If you had no deductions itemized, then you can probably stop worrying so much about what receipts to keep -- at least what to keep for tax purposes.

Until the next time friends remember; there is no easy way to deal with taxes, but being prepared by having a good accounting plan throughout the year, will make April 2006 as simple as possible.