It's not the fun thing to do. Bedel, with 22 years of financial planning experience, often recommends that her clients use the Homefile filing system to get started, as it can quickly help them set up a file. She suggests that clients start filing current papers to not get overburdened. Having an organized system in place helps with tax preparations and allows for quick preparation of a financial statemtemmement in order to buy a home or apply for another type of loan. Bedel suggests tools like Quicken, Microsoft Money or similar computer programs for expense tracking.
Most programs offer multiple tax categories and report printing capabilities.
Advanced pr programs feature areas to track other financial assets and investments. An organized filing and tracking system becomes your best defense against IRS audits. Priority tax documents, such as medical, dental, education or job expenses, charitable contributions, interest statements, income reports and real estate transactions, will be filed in their proper place for easy retrieval. For further help with tax documentation, Martin's Financial Planning Organizer Kit handbook lists free IRS publications you can order by mail or find at your local public library. Though admittedly not perfect, Duran was glad that she had some sort of filing system in place when she and her husband, Paul, received an audit notice this summer for the Schedule C and medical expenses of their 1998 tax filing.