Saturday, February 13, 2010

The Tax Man Cometh - Are You Ready?

It is tax season at our house. This means that I am spending a few hours here and there organizing my materials for our tax preparer. How do you get ready for tax season? Do you do a little bit here are there all year long? Do you have a spot where you keep all of your tax related stuff? Or do you spend the first three months of the year tracking everything down?

I like to do a little here and a little there. I have an accordion file where I keep my tax papers. As I go through the year, those papers move from monthly envelopes where I keep my bills and receipts to this accordion file. Then, after all the January documents float in, I organize the papers and transfer the data to a spreadsheet for my tax preparer.

It isn't a fun process, by any means. But it goes more quickly when I do a little every month - and I remember things better right after they happened rather than a year later!

I would love to hear how you manage your tax preparation. Happy Tax Season.


  1. I love how the IRS (through their FreeFile partnership program) and state of Wisconsin (through their Department of Revenue web page) have made it easy to file for free online (for filers who meet certain conditions), thereby averting the need for costly tax software or the always-cumbersome paper methods of the past. Even if we are due a large refund (which I like to calculate by hand well in advance & well before I actually file), I almost never file until close to the deadline. It's kind of like a mini-Christmas for us, but we don't want to open the present too early! :)

    Our lives are not as complicated as other folks financially which makes tax time not as stressful as that of other households from I've heard. We don't itemize our deductions, which takes away about 90% of the reputed 'joy' of tax season and eliminates much of the need for much serious record-keeping. Someday we'd like to own a home which is often the point in time in which households begin to itemize, so I imagine that day is down the road for us...

    One item which I am proud of... Wisconsin likes to capture sales tax that is lost to catalog (eg. Figi's, Swiss Colony) and internet (eg. Amazon, purchases. The state return asks you point-blank whether you purchased items in these manners in the past year. Of course, this is a nice opportunity to be evasive and simply say 'no' but I am the only one I've ever asked (and yes I do like to ask others) who has put in a nonzero amount. Usually, it's books we've purchased on Amazon.

    Render unto Caesar what is Casear's!! :)

  2. Yeah, we get nailed with the internet purchases, too, although we are way down this year from past years. And I have mentioned it to people who look at me like I am crazy, but we try to follow the directions when we are aware of them.