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Organizing Receipts 101

Apr 24, 2005 | | Comments Comments Off

Q: I just finished my taxes, and I know my refund would have been bigger if I had been able to find more of my tax-related receipts. You’ve talked about how to organize your records and when to get rid of old paperwork. Do you have any suggestions for tracking receipts?

A: Essentially, you need to figure out a way to separate your important receipts from all the other paperwork you carry around, and to be consistent with whatever system you set up.

Professional organizer Debbie Stanley has some great tips about handling receipts in her book, “Organize Your Personal Finances in No Time” (2004, Que). She notes that most receipts for purchases, ATM withdrawals and credit card transactions need to be retained for short periods of time only; typically three months or less, which is long enough to compare them against your statements or return an unwanted item.

So your first step is implementing a system in your wallet or purse that allows you to separate these short-term receipts from those you’ll need to retain longer, such as tax-related paperwork or sales slips for major purchases.

Some folks will have a third category: receipts that they need for reimbursement or rebates. If you’re an employee who regularly travels or entertains clients, you’ll want to include this category so you can get paid back for your expenditures.

Fortunately, many wallets have a number of different compartments where you can stow receipts of different types, or you might want to carry envelopes for this purpose in your backpack or purse.

Then, every night–or at least a few times a week–you can empty your receipts into an appropriate file folder or box: one labeled for short-term receipts, one for taxes and one for reimbursements or rebates.

The key to being able to find your important receipts when you need them is to put them in the same place every time–both when you receive them and when you get home. Don’t stuff them in your pants pocket or let clerks put them in the bags, and don’t let them linger in your wallet or purse.

Stanley also has a pretty nifty idea for dealing with short-term receipts. Rather than waste much time sorting through them, she set up three file folders, labeled “This Month,” “Last Month” and “Two Months Ago.” She empties her short-term receipts from her wallet into the “This Month” folder; at the end of the month, she transfers the contents of that folder to the “Last Month” folder. The previous contents of the “Last Month” go into the “Two Months Ago” folder, and whatever’s in the “Two Months Ago” folder goes into the trash. After three months, her receipts have spent time in each folder and she’s had plenty of time to retrieve them if necessary.

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Categories : Q&A, Taxes, The Basics