It’s almost tax time again! Could there be deductions you’ll miss out on because you didn’t save receipts?
It’s almost tax time again! For so many filers, there’s a last-minute scramble to gather paperwork, followed by the uncomfortable feeling that a little organization could have saved a lot of grief — and money. Could there be deductions you’ll miss out on because you didn’t save receipts?
Maybe it’s too late to really get your ducks in a row this year. But why not get organized now for 2011’s taxes and reap the maximum benefits?
“Get a receipt!” says Brian Kelly of R&G Brenner Income Tax Consultants in New York. You could be deducting expenses “for anything you have to buy related to your work — special shoes, uniforms, work gloves.”
If you purchased work-related items at the store along with items for personal use, save the receipt and circle the work-related items. Save dry-cleaning receipts for work uniforms, too. “Have the dry cleaner put ‘uniform’ on the receipt,” Kelly says.
Retain receipts for energy-efficient updates to your home. “They aren’t all deductible, but some are,” says Kelly.
Megan Sonicksen of the National Association of Tax Professionals advises filers to “save all receipts associated with charitable contributions, medical expenses, child-care expenses, moving expenses, job-search expenses, union dues, tax-preparation expenses, safety deposit box expenses and education-related expenses,” or whatever applies to your family’s situation.
When you pick up your 2010 taxes from your preparer, Sonicksen suggests asking if there were any deductions or credits you missed out on and might be eligible for in 2011. At that point, “your tax situation will be fresh in your preparer’s mind.”
So how do you keep it all together?
If you only anticipate a handful of receipts, a large envelope in your home office labeled “tax receipts 2011,” might work. If you have hundreds, though, you’ll need to buckle down and get organized.
Sande Nelson, a professional organizer in New York, suggests using four folders, one for each quarter. Make an alphabetical list of all of your deductible receipts. Total each subcategory and “you can give your accountant one sheet of paper” with the total expenses for each subcategory and leave the files in your office.
“A lot of money can be saved on accounting fees this way,” she says. “You can also track and control expenditures by actually seeing what you spend and how it is spent.”