Simple Solutions for Tax Papers

It is that time of year again, that many dread ... tax time!

This year you have until April 17 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:

• 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 Jan. 31. 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.
• Flexible Spending Account File: If you do not participate in a Flexible Spending Account (FSA) or similar program with your employer, skip ahead to the next item. If you do participate in an FSA, be sure to organize and submit all of your claims before the grace period (typically 2 1/2 months) ends for your plan. This will prevent you from losing your pretax funds contributed to the account. 
• 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 certified public accountant. 

Carolyn Anderson-Fermann is a public speaker, organizing expert and founder of Simply Organized Life. On March 2, Carolyn will be presenting "Secrets of a Simply Organized Life" with Ann Arbor Recreation and Education. There is a $25 fee for this public event. Register with the Ann Arbor Recreation and Education Department.