Organizing Financial Paperwork for 2012 Taxes

For most of us, the tax season is officially over. However if you’re like millions of other Americans who filed extensions because they weren’t able to finish by the April 15 deadline, you may still be knee-deep in paperwork.

With the flurry of activity around taxes that consumes us, now is the perfect time to think about how to organize financial paperwork and set up a system so 2011’s tax season is a breeze. Use your CPA’s tax organizer or last year’s tax return as your guide:

  1. Mortgage Statements.  If you own property, have a separate file (virtual or real) for your loan statements reflecting payments including interest paid and principal balance. Many financial institutions have a running tally of how much mortgage interest you pay. This is an excellent source of information for your CPA or tax preparation professional to forecast your 2012 tax bill.
  2. Paycheck Stubs. Keep the information that accompanies your paystub. Again, this is great info for planning next year’s tax bill. Maybe you need to claim more deductions to increase cash flow, or decrease them to eliminate a hefty tax bill come next April.
  3. Business Income & Expenses. If you’re a contractor or self-employed, invest in a program that specifically tracks income and business-related expenses.  Quicken and QuickBooks have most of the standard reports you need as well as the categories (e.g., auto repair vs. gas) already loaded. Be aware that some customization is usually required. Setting it up correctly will save you dividends – your time and unnecessary heartache – when its crunch time. If you need to file quarterly taxes, you’ll want easy-to-use reports needed to organize financial documentation.
  4. Charitable Contributions. Use a value guide when donating non-cash goods to your favorite charity. The Salvation Army updates their valuation guide regularly. In my practice, many of my clients ask me to research the charity for legitimacy.  Check out as it’s a great resource in learning about a specific charity and where monies are spent. You can also get a tax break if you volunteer. While you can’t deduct the value of your time, you can deduct a portion ($0.14/mi*) of your mileage.

    Speaking of mileage, keep a log and tally it up monthly and file it in your new 2011 tax file. Come tax time, it’s already added up and documented. *Check with your tax professional for your specific situation.

  5. 2011 Tax File. If you have a file cabinet, create a tax file now so you have a place to stash receipts you’ll need for next year.  If you’re short on storage space, most people only need as much space as an accordion file from an office supply store. They close securely and allow you to label different slots so you can easily review and retrieve important paperwork.

Need help to setting up and organizing financial paperwork or keeping track of business expenses? Then schedule a free 30-minute consultation with Fiscally Fit, Inc. Email me at or call (650) 965-4090 for a no-cost, no-obligation appointment.

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