Quarterly Newsletter
Dear :

"Taxes" seem to be on many of our minds at this time of year......and if they're not on yours, they should be!


While April 15th is my least favorite day of the year, I try to make the process of compiling the documents my accountant will need from me as quick, accurate and painless as possible.


The articles in this newsletter reflect the organizational methods that we recommend and the questions that our clients most frequently ask on this subject.  


Here's to your April 15th deadline being a little less hectic this year.


With Warm Regards,


tax docs w/calculator

  Getting This Year's Taxes Ready

Do you dread the task of compiling all those documents needed to do your taxes?  While this may never become a favorite activity -- it doesn't have to be an annual ordeal.  


Follow these tips to ready yourself for this year's tax deadline and for every April 15th to come.


Contact Your Accountant: Find out when your accountant needs to have your information in their hands. Be sure to mark that date on your calendar.


Give Yourself "Calendar" Time: Make the time to gather the information your accountant will need.  Schedule "appointments" with yourself and be sure to provide yourself with enough time to meet your accountant's deadline.


If you prepare your own tax return, the same advice holds true.  Make "dates" with yourself in order to complete the groundwork well in advance of when your taxes are due.


Create Three "Catch-All" Files: If you haven't already done so, set up a basic three-file system.  Label them "Tax Statements," "Tax-Deductible Expenses" and "Cost Basis for Investments Sold".


Locate and Sort Your Documents: First, pull together all of the 1099's, 1098's, W-2's, K-1's and other tax statements you've received for the 2009 tax year and place in the "Tax Statements" file. Include any other documentation that shows sources of your income, gains or losses.


Next, gather all documentation for tax-deductible expenses like paid bills, cancelled checks, cash receipts or credit card receipts and sort by each type of expense. Add up the total that you spent for each category and record that amount on a piece of paper attached to the front of each group. Clip each group together and label with the tax year and the expense type.    


Lastly, compile your records that prove the amount you originally paid for any investments that you sold in 2009.  


If you spent time searching for any of the items listed above you will want to read the article below on "Getting Ready for Next Year's Taxes." You'll be amazed at how fast and easy it can be! 


  This Quarter's

 "Highlighted Project"
  client clean desk 2       
   organized home office/desk  
This client will have a much easier time working on their tax infomation on their newly cleared desk and clutter free office.

mesh file box

Get Ready for Next Year's
Taxes and Beyond NOW!
How? Start by marking your calendar! Put future tax payment due dates on your calendar.  Then initiate a process to keep you on track for the upcoming year.
Create a System:
 Develop a method for capturing all of your sources of income, proof of payment for your tax-deductible expenses and cost basis for your investments.  
  • Your system should include the following: Separate files for each type of tax-deductible expense, i.e. donations, medical expenses (if you claim them), property taxes, and deductible child care expenses, etc. If separate files seems like more than you'll need, just make one file for all of your tax-deductible expenses.      
  •  If you are self-employed, include separate files for each category of tax-deductible business expense. For instance, you may have files showing proof of payment for your business phone bills, advertising expenses, postage and business insurance, etc. Again, you may just need one file to capture all of these if separate files seem like too much.  
  •  A file or recordkeeping method to capture proof of all of your income for the current year. You'll need to keep separate records for business vs. non-business income. Also, note the source of any deposits you make in your check register.  
  • Files that contain proof of what you originally paid for each of your investments. For property investments, you'll also want to keep records of any improvements you've made to the property. You'll need this information when you sell the investment to substantiate a gain or loss.
  • A file/statement-sized file box to hold your bank statements and investment statements. These should be separated by type, labeled with the year and institution name and retained for as long as your accountant advises.  
  • A file for the tax statements you will receive next year for your 2010 taxes.
 By creating a manageable tax filing system, you'll have peace of mind knowing that getting ready for tax time next year will be a breeze.
Contact Us
gift box 

Do You Want the "Gift" of Tax Organization


Smead ┬« makes a wonderful Tax Organizer that that you can store in a file drawer or on a bookshelf. It includes a document checklist to guide you in what you'll need to gather and keep in the file, as well as labels to personalize the file pockets. It is a very handy product.


I happen to have 9 Smead┬« Tax Organizers in my possession.  If you would like one, I will randomly select 9 names from those of you who let me know what types of articles or topics you'd like to see featured in our next newsletter. E-mail me at [email protected].   

In This Issue
Getting Ready for This Year's Taxes
This Quarter's Highlighted Project
Get Ready for Next Year's Taxes
Do You Want the Gift of Tax Organization?
How to Maximize Your Donations
How Long to Keep Tax Records?
Secure Disposal of Old Tax Records
organized home office/desk 
How to Maximize Your Donations
 If you've itemized the non-monetary donations you made in 2009, you may be wondering how to assign a value to each item.  According to the IRS, the "value" should reflect the fair market value of the item. Easy enough in theory, but in reality, how does one decide "fair market" value?
There are several resources that can help: 
  • The Salvation Army has put together a valuation guide that is located on their website at www.satruck.com Just click onto the Valuation Guide area. They give a range of values specified for each type of item. New items in perfect condition can be valued at or near the high end of the range, while older items showing signs of wear and tear would be valued lower. 
  • You can also purchase a book called "Money for Your Used Clothing" at www.mfyuc.com .  The book provides a place for you to record your donations for the year and includes a valuation guide as well.
For Specific IRS requirements for charitable donations, go to www.irs.gov and put "Publication 1771" in the search bar at the top right hand corner of the page.
Remember, making non-monetary donations is a great way to receive tax benefits - but  only if you have a system in place to track those donations.
appointment book
How Long to Keep Tax Records?
The short answer is to ask your accountant and heed their advice! But the following should explain the answer they give you.
The IRS can audit your tax return for:
  •  3 years after you file your return, for any reason;
  • 6 years after you file, if they suspect you underreported your income by 25% or more;  
  • 7 years if you file a claim for a loss from worthless securities; 
  • Indefinitely, if you file a fraudulent return or have never filed income taxes.
This information can be found in IRS Publication 552, Recordkeeping for Individuals, at www.irs.gov/pub.
These time-frames assume that documentation is not needed for other purposes. Consider if there is any outstanding litigation that may require you to keep these files longer than the IRS does.

 Secure Disposal of Old Tax Records
Once you've determined you have old tax back-up (supporting documents) that you no longer need to keep, you'll want to make sure those documents are shred.
You have several options to do so: 
  • Buy a cross cut shredder and do it yourself; 
  • Use a shredding company. Most will come to your home or business for a fee to pick up the shredding - they generally either shred on site or take your material to their location to be shred. They will provide you with a certificate of destruction.
  • Office Max now offers shredding at most of its stores.  For a fee, they will accept your documents for secure destruction. Your records will be stored in locked security consoles until they are destroyed on-site in a special shredding vehicle.   Contact your local Office Max for more information.
  • Attend a Free Shredding Event. Banks or municipalities sometimes offer free shred events.  Look for their announcements for dates and locations. Glenview State Bank will provide free paper shredding services on four Saturdays in 2010. The next two are as follows:
    --Saturday, April 17 at their 800 Waukegan Road, Glenview location  
    -- Saturday, June 19 at their 1707 Shermer, Northbrook location
    -- See their website at www.gsb.com/infoC/news.html for additional dates, hours, weight limits and other instructions.