Very soon everyone will start preparing to do their 2007 income tax returns. However, today on Tax Tip Thursday I will share a tip on how you can start planning for your 2008 tax return. I know, I know. . . You are still working on getting all of the documentation together for your 2007 taxes. Your 2008 return probably seems like a lifetime away. However, read on and I will share one simple tip that I have been using for years to help keep me organized. And it will only take about 30 seconds of your time.

On January 1 of every year I pull out a new manila folder, and write the current year on it followed by the words “tax return”. In my case the folder I recently created is labeled “2008 tax return”. I then add this empty folder in with the rest of my files, and through the year I put everything and anything in it that may have some impact on my tax return. If I don’t yet know if something will have an impact, I stick it in the folder anyways and let my accountant decide if it is useful when tax time comes. The bottom line is that I have one spot where all documentation is kept that may impact my tax return for the current year. This includes things like receipts I get when I donate items to Goodwill, receipts related to my consulting practice, or even the receipt for that storm door I purchased so that when tax time comes I remember to claim the appropriate energy credit.

Hopefully this simple tip will help keep your important tax return documents together and organized in one spot. If you haven’t yet created your folder, it’s not too late!

The Money Kings

Keywords: taxes, organization, 2008, credits, tax return, tip