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Blog: Minimizing Financial Clutter
Even More Ways to Drive Your Accountant Crazy at Tax Time: #3

Husband: "I thought you were going to bring the receipts for our charitable donations." 
Wife:  "No, you were supposed to bring them.  You're the one who wanted to give away our money to all of those charities, anyway."
Husband:  "They were all worthy causes.  AND they're tax deductions for us."
Wife:  "Not when you forget to bring the receipts to the accountant, they aren't."
Husband:  "ME?!  YOU WERE SUPPOSED TO BRING THEM!  And why are you such a cheapskate, anyway?
Your poor accountant…  You scheduled a block of time with him to have him collect the information necessary to complete your tax returns.  Instead, you're paying him for marriage counseling!  And he still doesn't have the information he needs to do your taxes.
My accountant, Marc Asher, (www.asher-simons.com) told me that this is one of his pet peeves during tax season:  husbands and wives arguing with each other over finances during their tax appointment.
Like your accountant, I'm no marriage counselor.  But if that fictional conversation rings true for you and your spouse, I'm going to give you some advice:  Save it for another time and another place.  Don't have that conversation during your tax appointment with your accountant.  After all, you and your accountant are working on LAST YEAR'S TAXES.  Last year means THE PAST.  There's nothing you can do in 2008 to change what happened in 2007. 
Organizationally-speaking, however, there are some things you can do now to make your tax appointment proceed smoothly for all parties:
      Bring complete data.  It's pretty simple:  Your accountant can't prepare your complete tax return without complete data.  Delays cost you time and money, so bring everything with you the first time.
        How Do I Know What Data to Bring? 
      The easiest way to be sure you have everything you'll need is to look at last year's tax return.  Who sent you a W-2 or a 1099 last year?  You'll need to have those documents for this year, too, if you had a relationship with those companies in 2007.  If you had a different employer or a new bank in 2007, you'll need statements from those institutions.  What were your deductible expenses in 2006?  Did you have those types of expenses in 2007?  If so, you'll need those documents. 
      Were there any major changes in 2007?  Here are some examples:  If you bought or sold a house, you'll need the settlement documents.  If you had a baby, you'll need to bring the baby's social security number.  If you sold stock, you'll need to provide the cost basis for it (the date you bought it and how much you paid for it). 
      If your accountant is nice like mine, he will have provided you with a "tax organizer" booklet.  You should USE IT!  The first part consists of questions about what circumstances might have changed for you during the past year.  Answer them!  They will give you clues as to the documents you'll need to bring to your tax appointment, and they'll help your accountant prepare a timely and accurate return for you.  The second part is a "fill-in-the-blank" section.  Your accountant has filled in the numbers you used on your 2006 tax return; you just need to fill in your 2007 amounts!
      Publication #552 on the IRS website (http://www.irs.gov/pub/irs-pdf/p552.pdf)  tells you the types of documents you may need to have in order to prepare your taxes.  Of course, this information is not specific to your situation.  Heaven help you if you have to bring everything they mention!  But it is a place to start, especially if you've never worked with an accountant in the past.
      Sort your data before you go.  If you haven't already done so, gather all of your tax-related documents and sort them into piles by type:  all income-related statements together, all business expenses together, all charitable donation receipts together, etc.  Clip each group together and label it with a sticky note. (To learn how to set up your 2008 tax document file system now so you won't have to go through this step next year, go to http://www.onlineorganizing.com/BlogEntry.asp?id=378.)
      Add 'em up.  Using a calculator that prints a tape, add up the receipts in each category, and print a tape that shows the total.  Attach the tape to the top of each group of receipts.
If your income, savings or expenses from last year have left something to be desired, then you and your spouse can and SHOULD communicate your concerns with each other and make some changes NOW that will have a positive effect on your financial picture … and on next year's tax appointment.  Your accountant will probably be happy to help you with your planning.  But the tax appointment is not the time for him to do so.  He likely has back-to-back appointments scheduled for the next few months.  Instead, schedule a longer appointment for after the tax season.  Meanwhile, you and your spouse can use the time to review your 2007 finances and come to an agreement on how you'd like things to be different this time next year.
Your accountant will heave a sigh of relief, too.

posted on: 1/27/2008 11:30:00 AM by Katherine Trezise
category: Finances

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Minimizing Financial Clutter

by Katherine Trezise

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About Katherine:

Katherine Trezise is president of Absolutely Organized, based in Baltimore, MD. She is president-elect of the National Study Group on Chronic Disorganization. Katherine holds a masters degree in business administration, is a Certified Professional Organizer® and a Certified Professional Organizer in Chronic Disorganization®. Absolutely Organized specializes in helping people organize their homes, paperwork and financial records to make room in their lives for the things, people and activities that are most important to them.

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