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!"
organize@juliebestry.com
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