On Not Being a Turkey This Season

November. The word evokes a variety of images: Turning back the clocks. Bare tree limbs chattering in chill winds. The warm glow of a stuffed turkey on the table with the family gathered round. Gorging on feasts of college football. Organizing your financial records.

Say what? You mean that last isn’t part of your typical November? Maybe it should be; tax season’s just around the corner, you know.

Whether that groan was in response to what I just said or from overeating, buck up and get moving. Much like the mess in the kitchen, bookkeeping responsibilities don’t go away if you ignore them. Let them sit too long and strange, fuzzy things can creep out of them.

But this strikes no fear into your heart because you’re already on top of things, right? A place for everything and everything in its place, color-coded, arranged newest-to-oldest, clearly labeled, and bound.  Kudos! We love our OCD friends.

For the more relaxed of us, though, there’s still time. We don’t really gain an hour with the passing of Daylight Savings; those sixty minutes merely shift to another part of the clock. Let’s put them to use for something other than sleeping. You’ll be glad you did when you pull up your tax forms and have to decide what numbers to put in the boxes.

Better yet: if you set up a simple system this year for keeping organized in the future, you might be able to actually sleep that extra hour next November.

When gathering your yearly records, do you scrounge around the kitchen, laundry room, and den searching for errant papers? Once you find them, see where they’ve tended to congregate. That’s where you should put a meeting place for them—a box, a large envelope, or whatever works best. Keep it accessible and use it daily, and organization will be easier in subsequent years.

But when choosing the right depository for your records, bypass the bushel basket; there’s no need to keep every scrap of paper that crosses your palm. How can you know what’s important? For a starting place, get out last year’s tax return and see what you needed to prepare it. Then add documentation for any new real estate transactions, inheritances, investments, losses, etc.

To make things even simpler, separate your business records from personal, if applicable. For a home-based business, some of these might be the same, such as if you claim a portion of your real estate and utilities as business expenses. In our next post, we’ll discuss tax planning with your CPA before the end of the year so there are no surprises! Call and make an appointment now for December.

Oh, yeah, one more thing: while you’re at it, don’t forget to organize your electronic files too. Sure, the computer has a handy search feature, but that’s only for emergencies. It’s more efficient to be able to put your cursor on what you want the first time.

Wise decisions concerning time investments are as important as financial ones. With the days growing shorter before tax season descends, let’s take both seriously. You’ll be thankful you did.