It is that time of year again, that many dread....tax time!
This year you have until April 17, 2012 to file your taxes in the United States. With an extra day in February (yes, it is a leap year!) and two extra days in April, let's make 2012 the year that you do not have to file an extension.
For easy organizing of tax related paperwork, I recommend three basic files:
1) Annual Tax File
This can be as simple as a box or hanging file folder labeled "2011 Taxes". Employers and financial institutions are required to send financial statements (such as W2s and 1099s) by January 31st. While you are at it, make a file for 2012 as well, so you can place items inside (such as donation or property tax receipts) as they occur throughout the year.
2) Flexible Spending Account File
If you do not participate in a Flexible Spending Account (FSA) or similar program with your employer, skip ahead to item number 3. If you do participate in an FSA, be sure to organize and submit all of your claims before the grace period (typically 2.5 months) ends for your plan. This will prevent you from losing your pretax funds contributed to the account.
3) Medical Expense File
This can be the most complex of the three tax files listed here, particularly if you have enough medical expenses to deduct from your taxes. There are many ways to organize a medical expense file. A three ring binder for each family member, organized by service date (i.e. the date you went to the doctor) is generally the easiest way. You can tally out of pocket expenses on paper in each binder or create an expense category using a computerized tool such as Microsoft Excel or Quicken.
If you have specific questions regarding taxes, always consult with a tax expert, such as a CPA.