For most taxpayers, tax time starts well before the April filing deadline is near. Maintaining this deluge of necessary documents in an organized fashion can make for quite the headache ... but it doesn't have to. A simple three-folder organization system, paired with some helpful Canon gear, will not only help mitigate the last minute scramble, it will ensure you're filing as accurately as possible and help you avoid costly mistakes. The System Explained The three-folder system makes an easy, inexpensive addition to your tax office supplies this year. The organizational method — which was suggested by The Motley Fool — divides all of your tax time-appropriate paperwork into three basic folders:
• Folder #1: Income: All earnings-related things go into Folder 1, including your 1099s, your W2s and any other paperwork you receive reporting pennies earned.
• Folder #2: Expenses and Deductions: Receipts and statements for any deductions you plan to take at tax time go into this folder, including utility bills, mortgage statements and business receipts.
• Folder #3: Investments: This folder houses all investment documents, including statements, dividend notices and purchase receipts.
With this simple breakdown, you'll have an easier time of organizing your paperwork throughout the year and, come April, your taxes will be easier to complete.
The Clutter Controlled
While the three-folder system is great for managing the year-long paper accumulation, you can take one additional step to go completely paperless and eliminate the clutter — as well as the need to purchase additional tax preparation supplies. Your computer or tablet and one or two Canon gadgets makes this process a breeze.
Create the Folders
Before you can begin organizing your paperwork, you'll need to create three new folders on your computer or tablet, naming them "Income," "Expenses and Deductions" and "Investments." If you think you'll need the extra organizational space, create subfolders within each to further break down your files. For example, "Childcare" and "Medical" subfolders can help clean up an especially chaotic folder number two.
Convert Paper to E-File
Scan incoming paper documents using a multi-function printer like the Canon MAXIFY and save the scans to their respective folders so they're easily identified by file name. For example, save daycare invoices to the "Childcare" folder using the company name and billing month in the file name. This makes them easier to tally when it comes time to prepare your taxes, and a quick glance at the list of file names makes it easy to spot a missed invoice.
If printer scanning isn't your thing, the resolution and wireless functionality on most Canon DSLR cameras makes them just as adept at converting paper documents to electronic files. To minimize shaking (which causes blurry photos) and keep your framing consistent from document to document, mount the camera on a tripod or set it on the edge of a table. A remote shutter button also helps further eliminate camera movement, though you can achieve the same remote control functionality (as well as easy transfer of images to your computer) with the Camera Connect app installed on your smartphone or tablet.
The Commitment Made
It doesn't matter if you convert the clutter with your camera or your scanner; what matters is the commitment you make all year toward getting your paperwork organized. The 3-folder tax organization system makes tax prep super simple, and your Canon printer or camera takes it a step further: paperless.
- Subchaser: Photographing Documents