My forward motion on this issue is not hampered, however, by a lack of organization. I made it a point several years ago to do myself a favor when it came to tax time. I prepare for my taxes all year long instead of that narrow window between January and April 15. In my reference file cabinet, I have one file that is called “This Year’s Taxes.” I have another that is labeled “Next Year’s Taxes” so that when the New Year rolls over, I have a place to put the new year’s tax receipts. Every time that we generate a record of some sort that will be used to prove a claim for income tax purposes, that record is placed in the appropriate year’s hanging file folder.

Another way of helping out all year long is to use a money management program. I use “Microsoft Money” http://www.microsoft.com/catalog/display.asp?site=10020&subid=22&pg=1, but Intuit’s “Quicken” http://www.quicken2000.com/?" is just as useful. These programs are delightful for a variety of reasons. You can set them up to remind you to pay bills, and to remind you that automatic payments and deposits are affecting the balance in your checking account. You can use the program to help balance your check book and to help you keep track of investments. And each entry you make can be categorized to assist with tax preparation later. In fact, the programs have become so effective that as long as I keep up with my entries throughout the year, I don’t worry about going over each and every item to ensure it is correct.

For my business, I use Intuit’s “Quickbooks” http://www.quickbooks.com/quickbooks2000/query.html, which can also be set up for efficiency at income tax time. As long as I’m diligent in entering business transactions, I don’t have to worry at tax time that I’ve left something off. Data entry like this throughout the year takes discipline and can get tedious. But the rewards at tax time are worth it. When I generate a business transaction, if I don’t have time to enter the information into “Quickbooks” immediately, it gets put into a “Data Entry” folder in my Permanent Action Files on my desktop (see the Get It Together column of 12 January 2000 at http://www.ancestry.com/library/view/columns/together/10.asp). When I have time to do data entry, the receipt, once entered, is placed in the Business Receipts hanging file folder in my business filing cabinet. I keep all receipts for one year together and once I’ve filed my income tax, those receipts are stored with the income tax paperwork for that year.

When it comes to actually preparing the income tax return, I use Block Financial’s “Kiplinger TaxCut” http://www.taxcut.com. I’ve used the program for several years and have been quite happy with its interface with “Microsoft Money” and the tips and interview process that it contains. There are other tax preparation programs, naturally, including Intuit’s “TurboTax” http://www.turbotax.com/ and the new kid on the block, “Microsoft’s TaxSaver” http://www.microsoft.com/catalog/display.asp?site=712&subid=22&pg=1. The first two programs now offer you the option of doing your taxes online instead of purchasing the software. I purchase the software and work on my taxes on my hard drive, just for that added comfort factor of keeping my data private as well as being able to backup as I go along.

One of the advantages of using these software packages is that they will first ask you if you prepared your taxes the previous year in the software. You can import last year’s tax return so the program will already know a lot of your information and you don’t need to rekey it. Then, you can import data from your money management program and since you’ve categorized the entries, the program knows just where to put the data. The only part that is missing is that I can’t then have the tax program look at my business accounting program and place the information in the appropriate spaces. I have to do that part manually. Maybe on next year’s wish list they’ll help me out!

Tax time doesn’t have to be a negative, overwhelming experience. You can do yourself a favor for next year and start keeping track of this year’s expenses and filing the paperwork together in a file folder dedicated to next year’s tax return. If you have money coming, you might even get motivate to file early and put your money to good use right after the holidays. Happy taxes!