Do You Know Where Your Receipts Are?

By Mary Boisselle, Residential Real Estate Broker & Certified Probate Specialist

You say to yourself, “Where did the time go?” “Did I not just do my taxes?” You have got the same “Deer in Headlights” look in your eyes. Again, you have found yourself looking at what seems like the same pile of receipts that you had last year and the year before that and so on…

How about for the upcoming tax time — or even better, how about ALWAYS having your receipts organized and ready for tax time or just your ongoing accounting system? I see those “Deer in Headlights” eyes again, saying, “What Accounting System?”

Here is a very easy process (system) to follow and it is kind of fun. Yes, I said fun in a sentence about organizing!

A Simple System for Organizing Your Receipts

1. Find a place in your home or office where you can place one large pile and have the space to sort this large pile into smaller, consolidated piles.
2. Make sure you have three bags or boxes. One each for garbage, recycling, and shredding. Have extras on hand depending on how much stuff you have to go through.
3. Now that your staging area is set, go through all the areas and find receipts — drawers, closets, wallet, pockets, purses, car interior including in-between the seats and the glove box.
4. Put everything into one large pile in your staging area. Do not be overwhelmed by how large and messy the pile is.
5. Start the first sort. From the large pile, pick up one piece of paper at a time (O.H.I.O. — Only Handle It Once). Put the paper into a smaller pile that you have designated by a category such as: Insurance, Mortgage, Home Repair, etc. (Note: only put into these categories receipts that support your tax expenses information. If it DOES NOT support your tax information, it can be recycled or shredded.)
6. You can have a pile of “I do not know where this goes.” That is ok. You will go through the pile at the end of this process. By then, you will know. If you still do not know, it is probably a recycle or shred item.
7. When this first sorting process is complete, go through each of the categorized piles and see if anything else can be recycled or shredded.
8. With your second purge complete, now you can place the receipts into a labeled-by-category folder or large envelope. Or you can put all of them (depending on the amount) into one folder or envelope and label it. (If it is a large group of receipts, make sure to paperclip and sticky note each of the categories so they do not get disorganized again.)

You are now ready to start working on your tax preparation or hand your folders and envelope to your CPA. The cherry on top of this process is that you now have an organized system and process for automatically putting receipts into folders, keeping them ready for next year’s tax time. Saving you time, stress, and late fees!