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Organization Tuesday: Talking Turkey About Receipts (posted one day early)Views: 365
Nov 24, 2008 3:48 pmOrganization Tuesday: Talking Turkey About Receipts (posted one day early)#

Julie Bestry
[I'm heading out for Thanksgiving. I hope nobody minds having Organization Tuesday on Monday this week.]

Let's talk turkey about receipts.

Last week, I talked about how to develop a system for paying the bills and evaluating your financial health.  Most questions I received were some variance on how to handle dealing with the receipts we get when we're out shopping, rather than inside, paying, and how to record the information.  This is a topic that works well for both our personal and our business lives, and most of the steps will be similar.

Some of you worried that I gave short shrift to the topic of receipts when we discussed what papers we need to keep a few weeks ago.  So, we're going to cover that this week in a little further depth.  Then, after Thanksgiving, we're going to get into how to maintain the information from all those receipts in a system that works for tracking personal and business expenses.

(For those of you who were hoping for something a little more Thanksgiving-esque, please visit last year's Thanksgiving post, "A Few Business To-Do's Before Going Over The River And Through The Woods" and just come back to this post sometime after you gobble the turkey but before you head out for Black Friday shopping.)

So, let's look at some basic rules to help you figure out what to do with all of those receipts, particular the ones rushing into your life over the next month of holiday shopping (if conspicuous consumerism is your thing):

Keep cash receipts for things you might return, and for the duration return period only. If you pay for a McDonald's Happy Meal® in cash, toss the receipt out unless you're tracking all of your expenses to create a budget.  Otherwise, it's not like you're going to be returning that baked apple pie you ate yesterday. If you purchase toys or clothing for cash and the store's return policy is 30 days, discard your receipt after that period.  (Learn each store's return policy before buying.) Just keep a regular #10 business envelope in your tickler file or on your desk, and put each receipt into the envelope, either always in the front, or always in the back.  It'll make it easier to handle the process if they're in chronological or reverse chronological order.  Popping them in there at the end of the day takes no more than 10 seconds of your time.  

Keep all receipts for big ticket items (set your own benchmark--it could be $50 or $500, depending on your lifestyle) and things you might return, but only until the return period has expired.  Once the item's return option has expired, you can move if from that #10 business envelope to a file in your system for big ticket items, in case you ever have to prove ownership for an upgrade, recall or lawsuit.  In recent years, the IRS has allowed taxpayers to choose between deducting state taxes and sales tax; if you opt for sales tax, the default amount is usually your best bet, but if you've purchased a house, car or boat, you'll want proof of that big ticket deduction.

Keep all receipts for personal tax-deductible expenses, such as charitable donations and medical expenses, in your Tax Prep folder until you've completed your taxes. (You won't know until the end of the year whether you've accumulated a high enough percentage of your adjusted gross income to deduct most expenses.) Did you know your pharmacy will print a summary of all prescription purchases? Instead of keeping your pharmaceutical receipts indefinitely, just ask your pharmacy to give you a printout at mid-year and again in January for the preceding calendar year. (Of course, if you use a different pharmacy from the norm -- for example, when you're on vacation -- save those receipts.)

Keep all business receipts.  Most home-based businesses don't have enough individual receipts to make it worth developing a complicated system for handling receipts.  Just create a folder for each month of the year and pop the receipts in each, either in the front or in the back--but do it consistently each time.  That way, whether you record transactions daily, weekly or monthly, the process will be simple.  Many receipts fade, so sooner is better!

Keep receipts for all items for which you are due reimbursement until you get paid. Most often, this will include purchases submitted on your expense reports at work (if you have a day job).  Less regularly, you'll submit receipts to your insurance company for repairs done to your home or auto, or for medical procedures where the doctor's office won't file on your behalf. Occasionally, you'll even have to submit the receipts to someone else's insurance company if the other party was at fault. Be sure to keep photocopies (or better yet, provide photocopies and keep the originals).

Keep credit card receipts and deposit and ATM withdrawal tickets until your credit card or bank statements have arrived. Reconcile the receipts against the statements, and if the receipts don't fit any other mentioned category warranting keeping them, shred them.

Following these general rules should keep you protected in terms of financial, legal (proof of ownership) and most tax issues. However, if in addition to federal taxes, you also pay state and local taxes, check with a tax professional regarding any state- and municipal-tax reasons to keep other receipts. For example, Minnesota has two programs that allow residents to save on their state taxes for K-12 educational expenses.

Whatever you buy, have a system for collecting your receipts until you get home. Check receipts for accuracy before leaving the store and then put them neatly in your wallet, purse or (if you carry neither) an envelope in your pocket.  Don't be rushed away from the checkout or on to the next location, either by your schedule or shopping companions. Resolve not to have any crumpled receipts in your pockets or the bottoms of your shopping bags.

Have fun shopping this Thanksgiving week, whether at the stores or online.   Of course, I encourage you to purchase clutter-free gifts that don't have to be stored or dusted--things like gifts of experiences, as I suggest in my little ebook, Simplify the Season and Save Your Sanity.

Happy Thanksgiving, and I'll see you back here next Tuesday to talk about what to do with all those receipts...once you get home.

Julie Bestry, Certified Professional Organizer®
Best Results Organizing
"Don't apologize. Organize!"
Visit http://www.juliebestry.com to save time and money, reduce stress and increase your productivity

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