The thought of planning ahead may seem a bit useless after the year we have just been through. Nevertheless, time marches on and when you get ready for a new year, it helps you get organized and maybe even generates a little excitement over what is to come!
Unpaid Bills
If you don’t have a place already for important mail, you need to make one. It can be a small basket, a file folder, or a wall or desk mail sorter. When the mail comes in, shred or recycle most of it, but put the unpaid bills in a place of their own. Don’t let it pile up or sit in many places or things get lost and you will be stressed.
To Do
The second file or holder you need is one for things you need to take care of. This might be a subscription you need to cancel, a form to fill out and return, or anything that needs attention, but is not as critical as a bill. Dedicate time each week to these two folders so you don’t fall behind.
Tax Folder
The next thing you need is a file for incoming tax documents and receipts. Label one folder for Tax 2020, and one for Tax 2021. You’ll be getting official 2020 end-of-year documents that will be needed for tax filing, so don’t mix those with new 2021 receipts and deductions. After you pay a taxable item, put the receipt right in your tax file.
Tax Schedule
I recommend that you make a tax payment schedule or put all the dates for the year on your calendar now. If you make a list of dates, record the name of the tax, the due date, and leave a spot to record when you paid it. Keep it in your Unpaid Bills file all year. Here are a few of them:
| FEDERAL DEADLINE |
FILING | PAID ON |
STATE DEADLINE |
PAID ON |
|---|---|---|---|---|
| Jan. 15th | Q4 Estimated for 2020 | |||
| April 15th | 2020 filing or extension filing |
|||
| Q1 Estimated for 2021 | ||||
| June 15th | Q2 Estimated | |||
| Sept. 15th | Q3 Estimated | |||
| Jan. 15th, 2021 | Q4 Estimated |
State deadlines are usually similar but do vary by state.
Financial documents
Some people get a lot of boilerplate documents from their financial institutions. You only need to retain the year-end summaries, once the year is over. Keep monthly updates until you get the annual statement. Keep confirmations until they show on a monthly statement. Most of the rest can be shredded (anything with your name or account number on it) or recycled.
List of Assets
All of this makes a lot more sense, both for you and eventually for your children or agent(s), if you make a list of all the ‘on paper’ things that you currently own or owe, your assets and liabilities. Include bank accounts, real estate, any kind of investment accounts, cars, boats, motor homes, and insurance policies. If something has been sold, list it and say so. Otherwise, destroy all record of it. Get our free Legacy Organizer Checklist here if you don’t have one already.
Plan for Charitable Giving
Sit down and think rationally about where you plan to donate next year, and how much. By having a plan, you will be less tempted to give away more than you can afford. Allow a little ‘unspecified’ slack for the unexpected pull on your heartstrings but keep track so you don’t exceed that amount. Here’s a sample spreadsheet to help you:
I hope this helps you get ready for the coming year. If you want some help, or know someone who might, you know where to find me!
HAPPY NEW YEAR!