TAX SEASON IS HERE - THE FUN OF FILING OF INCOME TAXES THIS YEAR

 Got some tax returns out to clients.  It has not been easy this year.  In addition to the usual problems – missing papers that clients have to get to me after the sending the rest of the papers, etc.  I have been having unusual problems this year.

A business client was ill and needed surgery – so had to get an extension for her business as the returns for same were due March 15.  Then sales tax was due March 20 – luckily she was back at work part time by then and was able to mail me (she does not use a computer at all) a list of her sales so that was out on time.  

I keep a copy of last year's returns for clients on paper and scan all returns (and many other papers) into the computer to be able to store them in much less space and it is much easier to find and access what is needed.  I have been using 2 different software programs which make pdf files to do this.  We had to get a new “all in one” (printer, scanner, fax) during the past year – this is the second one we have bought – returned the first one due to scanner peculiarities and bought this one, a different unit from a different manufacture, which seemed to work fine.  But it has developed peculiarities also – I cannot add pages to a saved pdf file.  So I was making different files and copying the pages into the older one from the newer one.  Did that on a return recently and suddenly – all the pages are there, but I can only print the pages from the original file.  Husband found software to combine files – it took over my computer making itself the default not only for scanning, but also for printing (and we did not even know it printed.  Husband took it out today, but it still seems to be default for scanning and printing – I will have to have him reset the default programs for me.  (Yes, I could do it myself – in college he would copy my computer programs, but it gives him something to do and if anything goes awry, at least I will not get blamed while he repairs the problem.)
    

THOUGHT OF THE WEEK -

Tax time is here (in the USA) – don't forget to file on time or get an extension.  Don't give Uncle Sam (or his friends the states) a reason to charge you penalties and interest – you KNOW you pay them too much to begin with.  Only 19 days left to file (due April 18 this year Federally and in most states).

AS LONG AS I AM STUCK HOME FOR THE PANDEMIC - I AM CLEARING OUT MY FILES OF OLD ITEMS

 I have been figuring that while we are stuck home most of the time due to the pandemic I will get some long undone projects done.  One that I have actually made some progress on is cleaning out my filing cabinets.  

We have 3 half height (2 drawer) filing cabinets.  I say “we” but basically they are mine for files for my husband and myself.  When we lived in our apartment there was no room for full height filing cabinet so we bought 2 half height ones and used the top for a place to keep needed items which had to be kept out.  When we moved to our house we kept the 2 cabinets and added a third.  This has been a good idea as our computer printers/scanner is kept on top of them – a solution to 2 problems, where to put the printers and where to keep files.  Our desks sit facing each other with one side of the desks along the all and the cabinets on the other end of the desks – facing away from them into the room (basically into the walkway between the filing cabinets and the book shelves across from them which are along the wall.

I use the top drawer of the first cabinet for our personal items.  I use regular manila folders in this drawer.  I have been using the bottom drawer of that cabinet for two sets of folders – instruction manuals/warranty papers for items around the house and for travel brochures/maps and such.  The top drawer is fine as I go through our personal folders annually.  (Note – paid bills for us are NOT kept in this cabinet  - I have an accordion folder next to my desk chair for same.)  

The bottom drawer below that is rarely gone through, though I have been working for a couple of years on scanning the instruction manuals and warranty papers into my computer to make them either and quicker to find – unless they are complicated manuals such as for the refrigerator or a major tool.  I have gone through and removed duplicate travel brochures to only keep the most recent one.  These two drawers are generally very full by the end of the year.

The top drawer of the middle cabinet has been used for financial matters for our craft business.  Bills for the business do go into this drawer and I go through it every year to remove bills and store with our personal ones.  It also has information about craft shows we have done or want to do, and stores/online businesses that carry items of interest to us.  

The  bottom drawer of the middle cabinet has two different sets of files – in the front is the files for my embroidery chapter and in the rear are the files for our reenactment unit.  (There are less files for the embroidery chapter which is why they are in the front.)  Since this drawer is almost on the floor and I am getting older it has become more problematic to get to the reenactment unit files – if nothing else when I lean down my progressive lens eyeglasses shift and everything goes out of focus.  I have wanted to shift one or the other to a different drawer to help get rid of this problem. I also have to sit on a small step we keep in the room to see the files which are further back in the drawer.

In the top drawer of the third cabinet was some additional files for our craft business and catalogs – lots of catalogs – mostly for our craft business, but some for us also.  We rarely order from catalogs or otherwise, but when we need something for the craft business we can go through and find what we need and who sells it and decide who to buy from and how to do so.  Of course we have not received a new catalog in probably over a decade, so the catalogs are not current.  

In the bottom of the third drawer of the third cabinet are my files for accounting clients, etc. and some files for husband related to his certifications and websites through which he has done counseling plus some files left from his former job - he quit over 10 years ago.

I figured that as long as I am stuck home anyway whenever I have some time while in office I would work on going on through the catalogs to see what to keep and get rid of the rest so I could put the two files for the 2 clubs into separate drawers.  Yes, Covid-19 is giving time at home to clear out old papers.  

I started a new spreadsheet for the catalogs.  I take some out and decide if we would still be interested in what each if for.  No longer interested – catalog info is put in the spreadsheet (after checking that the business still exists) and then the catalog goes into a pile to recycle.  With the spreadsheet info we can either go the website of the company or call for a new catalog if we need it.  Catalogs we are still interested in I check to see if the business still exists and how well their items are shown on their website.  If the company still exists, again I put the company's info in the spreadsheet.  If the website shows the items they carry – catalog gets recycled.  If the company is gone – catalog gets recycled.  If the website does not show what they carry and we are still interested, I keep the catalog even though it is old.  Amazing how many catalogs were recycled –  of course I remove the mailing info first and shred it.  

Today I started going through my old accounting files.  If I have not worked for the client in several years I make sure that all of the info in the file has been scanned into the computer and shred what is in the file.  (I keep copies of client's taxes other than the most recent year done as pdfs in my computer.  I keep the most recent year on paper as it is easier to refer to the following year when preparing that year's return.)  I also have been going through the other files in this drawer – forms I have to file for me to be able to prepare tax returns, proof of classes I had to take, returns shredded before I started keeping the record of same in a spreadsheet, etc. are being scanned into the computer (this is what I worked on today).  Clients who I go to and “do” their books have more papers retained than those who I just prepare income taxes for, including a traditional file folder that I take to them when I am working at their location so anything related does not get lost.  I filled my shredder basket today.  

I have a few more accounting files to go through and then I will go through the files I keep for husband for his counseling practice.  For convenience the two businesses will continue to share a file drawer.  

I plan to separate the two clubs into separate drawers and move the travel items into back of the drawer with my embroidery chapter's file since (as mentioned) there a lot less of them than of the reenactment unit's files.  We will travel again one day – when the corona virus is in control and it is safe.

I will continue to scan in the instructions and warranties books for things in the house and hope to get it down to a limited number of items which have too much info in them to get rid of.  Since small parts that came with items are also in this drawer, I will end up bagging and labeling them and keeping them in this drawer also.  

The drawers are so much emptier than when I started and easier to use.  

THOUGHT OF THE WEEK -

If you are stuck in the house anyway – use your time to work on getting rid of unneeded things.  There must be some papers that sit where they are just because of lack of thought of them.  Try to find them.  Decide if you need them.  If you need a copy of them and NOT the originals – scan them and shred the originals (birth certificates and marriage licenses are among the items that one needs to keep the original).  If you need to keep them – set them up so they are kept in some sort of order.  As someone raised in business I prefer papers in a file folder in a file drawer – what works for you to keep to track of the paper originals you need to keep?

WORKING ON PAPEWORK EARLY TO SAVE MONEY ON REAL ESTATE TAXES - OOPS A WEEK LATE

My apologies - this post was written for and I thought I posted it on September 16.  While posting my September 23 post, I found this was still marked as draft -

  I am working on paperwork for a real estate credit that husband and I are entitled since we are over 65 and have an income on the low side.  This paperwork has to be filled in and filed annually.  Last year's filing ran something like 125 pages.  This is due to change they made last year.  We have to provide proof of all our business income and expenses.  The paperwork was crazy before this requirement, but with it….

At least this year I knew these extra records would be needed, so before I put away our financial records from 2019 I pulled out and scanned the needed paperwork into the computer – or at least I thought I did all of it.  I even made sure that the expenses for our two extremely small businesses added up to the tax return numbers which came from my computer software.  

The form to fill in and mail (or drop off) with the papers needed came and I started, slowly putting it all together.  I have combined various sections of what is needed with cover pages for each in my computer as pdf files.  It should not be hard, I had already scanned in the papers – right?  

General proof of income – 1099s and such, no problem.  Medical expenses (we can subtract this from our income in the calculation)  I had most of them ready – we have to have printouts, they do not accept paid bills or copies of checks that paid them as proof.  I had contacted and have this printouts from our medical insurance companies which is most of the expense.  In normal years we go into our pharmacy and they hand us printouts and we also bought eyeglasses last year and had planned to do same with the optician.  But this is not a normal year.  The optician is mailing the copies of our records, I still have to telephone our pharmacy about same.  

I had moved on to putting together the information from our businesses.  I thought I had it all – I had scanned them into the computer and just needed to finish assembling them.  But, neither business' receipts match the computer records of what they should be.  They are small amounts, but this process is so crazy – they may disallow the $1.90 here or the $20 there.  Hopefully if they do it will not affect the exemption amount by much.

Imagine having to put together all the expenses just from your car and having to make copies of all of them.  In this case I have to also give a breakdown of how much is from miles driven for husband's business and how many much for miles driven for mine and apportion the cost of each expense (which was already done for our income taxes).  How many small credit card receipts for gas do you end up with in a year?

While the cut off date to file this form and supporting paperwork is January 2, 2021, I don't like to wait until the last minute to deal with it.  Last year when we needed to go and bring in the paperwork to the county offices was when husband needed to get teeth added to his upper denture (also includeable as a medical expense for IRS and for this) and we ended up having the impression of his teeth taken and then driving to the county office – where he would have had to wait in the car anyway (no place to park), but in this case did not want to go in within without his teeth also.  So, since we are stuck in the house due to the corona virus pandemic anyway, I have been working on putting all this together and filing in the forms since August.  

We were discussing how we file the paperwork.  We used to mail to the county by certified mail.  In 2018 we mailed in the 2017 information for the 2019 taxes  (yes, it is terribly confusing) by mail as usual.  Then we received a month or so later a robo phone call from the county executive that we had not filed the papers!  I tried calling the office  - but the answering machine basically said “we are too busy to talk to you, don't bother us”  When I called again later in the day added to that message was “and don't try to come in here as there is no parking”.  This last part being true and has been decades, which was why husband dropped me off and waited in the car.   In a panic we reprinted and assembled everything to bring it to them.  In the interim a story on the news was that they were suppose to send the call to a few people who had filed in the past and had not yet filed, but they sent to every property owner in the county.  Unsure of if we were in the group whose paperwork had not been received, we drove to the office and I waited in their waiting room.  Luckily by the time we went there a couple of days after the call – the lines were no longer 5 hours long as they were the day after the mistaken calls.  They did have our paperwork.  

Last year we decided we go there (as we did) and turn in the paperwork in person and receive a receipt from them for it and did so.  We planned to continue to do so.  But we are now trying to decide since we are not going out due to Covid 19 – do we venture into the post office (that we don't go to, even overnight) to pick up our mail or do we go to the county office where I will wait my turn for what might be hours – but we will know for sure that they have our paperwork?  (Yes, the difference in what we pay in property taxes, especially the school taxes, with and without the exemption is enough to make it worthwhile.)  

Hopefully I will soon be done with the paperwork and we can decide which we will do and when.  I am guessing the early in the season for this, the fewer people who will be waiting, so I will try to finish as quickly as I can.  I did send an email to the head of the department and asked if they will have drive-up windows for this as they did for people to come in and pay the property taxes.  I don't figure they will or even that I will get an answer.

THOUGHT OF THE WEEK -

Use the time you are stuck in the house to get work done.  I have been catching up all sorts of paperwork and household chores that I have put off, well, for years since I am home.  Our shower soon might be even clean enough to actually not worry about getting dirtier when one takes one.  :-)

My thoughts and prayers both to those in the United States west where there are terrible fires and those in the southeast who have been going through yet another major hurricane this week.