Tax Document Clinic Part 2: Organizing All Those Papers

(Tax Document Clinic Part 1: What to Keep & How Long)

First step... shred all the things you no longer need. And I do mean shred. (Didn't you read my identity theft post?)

Now, the easiest way to do this, per a professional organizer, is to sort your documents into three categories: Income, Expenses, and Statements. For those of you who are anal out there, you can subdivide Statements into Banking, Credit Cards, Investments, and Retirement. Now, arrange these by year. Buy a little plastic hanging container, some green hanging folders, some manila folders to keep paperwork within a main category neat, and then store. Throughout the year, file as you go along and you'll be ready to go for '08.

Want something more sophisticated? See Organizing Financial and Tax Return Information Digitally by Ariane over at Neat & Simple Living. The coolest gadgets? Neat Receipts to scan and sort your receipts and the Fujitsu Scan Snap to scan and sort statements. Sweet! Check out her store for other interesting organization gadgets.

Just remember... e-filing bad so no tax software!