Paperwork: A Blessing And A Curse

Paperwork…arghI have been under the pressure of a deadline lately. One of the most important deadlines, in fact: filing my taxes.

Normally I’d have my taxes done by now but this year is different.

In the old house I had a desk and an office area where I kept most of our recent paperwork organized. As we approached the move, I let my paperwork build up and bills ended up in “to be filed” grocery bags.

All that paperwork (in addition to the older stuff) ended up in multiple boxes, which then ended up in multiple rooms of the new house. I’m finding myself pretty disorganized when it comes to paperwork right now and with taxes due, I have to kick it into high gear.

To make matters worse, all the old paperwork (2005 and earlier) that hadn’t been filed properly to begin with got thrown the mix. I’ve been avoiding that mess since before we got married but it appears I can avoid it no longer.

My original plan of attack involved organizing only 2008 and 2007 paperwork then putting the older paperwork in bags separated by year. I figured the only reason I’d have to access the old stuff would be for an audit or to dispute a bill. Why waste my time organizing ancient bills for something as unlikely as an audit? If it happens I’ll just sort through the bags then.

On the other hand, why not just file that old paperwork into general categories (utilities, credit cards) while I’m already sorting it? It’s going to have to pass through my hands to be examined for date anyway; I might as well put it in some sort of order, right?

Good thinking, but that could lead to a slippery slope where I find myself wasting time and resources on paperwork that I’ll never need to look at again.

So, my plan is this:

I will properly file the 2007 and 2008 paperwork in the file cabinet. Those years are the most relevant and I need the 2007s accessible right now for taxes.

I will “lightly” organize the paperwork from 2006 and 2005. I bought accordion-style organizer boxes for the task. The boxes already have general categories labeled on the dividers so it should be easy to lightly organize those years as I sort them. I can also store the paperwork in those boxes for easy access.

Paperwork from 2001-2004 will be placed into bags labeled with the year. I didn’t want to give up on those years but I have to draw the line somewhere or I’ll be at this for weeks. It’s like I’m declaring paperwork bankruptcy for those years. I think the best plan at this point is to make a clean start going forward.

I have also made a promise that, from now on, all new paperwork will be organized into folders in the file cabinet, then stored in file boxes until shredder time.

I know paperwork isn’t fun but its life. Now I’m off to tackle some serious filing.

Do you have a method for organizing old paperwork? How far back to do you keep records?

Image Source: Librarian Avenger

$728 Worth Of Stuff Out The Door

Easy-Peasy!This weekend we gave our first big clothes donation to Goodwill. We sorted through all the clothes in our closet and pulled out anything we didn’t intend to wear again.

A frilly tie-dyed blouse (with sequins, no less) and a bright Mai-Tai patterned Hawaiian shirt found buried in the back of the closet come to mind.

The majority of the clothes weren’t nearly as horrifying, thank goodness. It’s mainly t-shirts and polos that just never got worn anymore.

We also got rid of most of the clothes that were too small, with only a few exceptions for clothes we really liked and hoped to fit into again someday. We are realists, though, so only a few too-small items got to stay.

We don’t go through our closet very often, and as a result there were clothes that should have been given away a long time ago. There was enough to fill 3 large boxes!

After entering all the items into ItsDeductible, we discovered our donation was worth $728. That’s awesome! Not only will someone else get the benefit of having these clothes but we get a tax deduction. It’s a win-win situation.

Using ItsDeductible is super simple and it works with TurboTax. You simply search for an item and it will give you the value based on condition. Old clothes are sometimes worth more than you would think! We tend to be conservative and value everything as medium quality, even if it has never been worn.

To make the process easier we looked at the categories in the program before we got started and tallied our donations according to those. I highly recommend sorting that way.

For instance, instead of writing “men’s shirt” we broke it down into t-shirt, polo shirt, dress shirt – just like ItsDeductible does. It made inputting the information a breeze. The more specific you are in what the clothing is the better. Best of all, you can transfer the information to TurboTax when you are done.

Even though we reduced the clothing in our closet by about half, we are just at the tip of the iceberg. There are boxes and boxes of old clothing in the garage that we have been carrying with us through the years for some reason.

Maybe it’s laziness. It’s easier to just leave it in the garage than to go through it, I suppose. No more! Every box will be opened and dealt with. I’m on a donation rampage!

Sunday we started going through those long-neglected boxes. Most of the clothes are from “way back when” so almost all of it will be donated. I am in the process of laundering those clothes for the next round of donations. Even though they are clean, they have been sitting in boxes for years and could use a freshening up. I figured that it’s a nice thing to do and helps get them on the racks for sale as quickly as possible.

Donating all this clothing is almost addictive. I can’t wait to see how much our next load adds up to!

Recession Fears = Flat Screen TV?

I’ll take a few of those!On our way home from visiting family this weekend we decided to listen to news radio. They were discussing the economy and the stimulus plan being proposed to help ward off a recession.

Many experts are on the fence on whether or not a tax rebate will help prevent a recession. Regardless, it seems the general population is happy about the proposed rebates. They mentioned that some people’s reaction to the rebate news was that they hoped the money would arrive before the super bowl so they could go get a flat screen TV. Funny….yet frightening.

At the risk of over simplifying it, a recession means that overall spending slows down which means fewer jobs are created (or jobs are even eliminated). Fears of a possible recession can become a self fulfilling prophecy because people often cut back on their spending if they think there is a trouble ahead. Less consumer spending means fewer sales coming in for businesses, they begin to downsize, more people can’t find work or they become unemployed, they have even less money to spend, and the cycle begins.

Bush’s proposed tax rebate plan is meant to encourage us to keep spending by giving us a little more money in our pockets. Although I welcome the idea of getting money back I wonder if it will help the economy in any lasting way.

First, it takes time to issue a refund and get it in the hands of the consumers. It may come too late to make an impact when we need it to. I’ve heard that checks could come as soon as June and that it could take 6 months to a year to reach its full effect on the economy. I guess those super bowl parties will have go on without new flat screens. With the way the stock market has been tanking I can’t help but wonder if we need the help now rather than later.

I also think the rebate counts on the majority of people spending that money immediately so it gets pumped right back into the economy. It’s been said that targeting the rebates to the lower and middle classes would help the most because those households are more financially strapped and are more likely to quickly spend the rebate money. It seems to be expected that the majority of the population outside of the upper class won’t be saving this money. I understand why that’s the assumption (it can be harder to save when money is tight) but it still bothers me.

Are people going to look at this money as a windfall to be spent frivously instead of as a way to get prepared for a possible recession? Quite frankly, if I feel a recession is coming I’m more likely to put that cash into my emergency fund or use it to pay off debt. I certainly wouldn’t go buy luxury or non-essential goods with it. It would feel irresponsible to me even if that’s what the money was intended for. Saving for an emergency fund needs to be a priority, especially during an economic down turn when jobs become vulnerable.

Unfortunately, paying off debt or putting that money in savings may not be the best way to boost the economy even if it puts my finances in a better position to handle a recession. Hmmm. Does wanting to save that money make me a bad American? Of course not.

Could it be that what’s best for the economy may not be what’s best for your household?

Image Source: PPDIGITAL

I’ll Be Keeping That, Uncle Sam

That’s a lot of junk!Last month, Clever Dude wrote a great post about how to value the clothing you donate to charity. As we’ve been packing up the house we’ve run across literally hundreds of items that we took one look at and decided it would be better to donate. Clever Dude wrote about a couple of IRS publications you can read to help you value your donations. I have to admit, I enjoy reading IRS publications about as much as I would enjoy a colonoscopy (and in case you are wondering, that is not at all).

I remembered when I was using Turbo Tax a couple years back that I had been offered a chance to buy their software, It’s Deductible, for about $30. So I went off in search of it again.

Lo and behold, the software is now free! And it integrates with Turbo Tax! On top of that, I was able to just login to my Intuit account and everything was tied together.

Nearly everything we had donated (with a few exceptions – check out this stink gun Melissa bought me a long time ago as a prank gift) was in the list and had a value.

We were conservative when it came to quality. We chose medium quality for all but a few items that were in near pristine condition.

This should make doing our taxes that much easier this year. And I feel pretty confident that the values they have chosen are pretty accurate. In addition, we are deciding to give more and more rather than try to sell these things at a garage sale where we might make a few bucks. I’d rather help someone in need, and get a little tax credit, than to get a few extra bucks in my pocket.

Picture by Joe Shlabotnik