Groundhog Day passed uneventfully at the Funny Money house, where we do, indeed, have our very own groundhog, despite several visits from the local trapping service to drag the critter out from under our deck before his tunneling damages the foundation.
After all that, the least the ungrateful varmint owes me is to pop up and give a weather forecast -- although, if he'd predicted six more weeks of this winter, I'd probably pull out my recipe for Groundhog Fricassee.
The six more weeks of bitter cold predicted by other groundhogs coincide with what remains of tax-filing season, and that's where my groundhog is smarter than me: While I'm wresting with IRS Form 1040, he'll go back to his soothing winter snooze.
I need some paper cuts
That's too bad, because I could use his help burrowing through the mountain of receipts, statements and charge slips I dig through to figure out what I owe Uncle Sam. Fortunately, Karen Newman, assistant director of tax services at the Accounting Aid Society in Detroit, says I can skip a lot of that hassle, unless a specific piece of paper is needed to back up a claimed deduction.
"Once you find out that you can't put this on your tax return, it can go," Newman says.
For example: Do you file your return using Form 1040A or Form 1040-EZ? Then you don't need anything but your W2 wage statements, because you don't itemize deductions on those forms. And if you claim the standard deduction on the regular 1040, you're not itemizing either.
Another way to cut the paper chase at tax time is to save only year-end statements on things like retirement accounts or mortgage statements. The year-end statement will list all your mortgage interest and, if you escrow your real estate, all taxes paid. On a retirement account, it'll show all your 2013 contributions or distributions. You still can keep the monthly statements, just don't haul them all out for tax calculations.
Unstuff that shoebox
Winnowing the paper pile can also save you money if you have your return professionally prepared, notes Mark Luscombe, principal federal tax analyst at CCH Tax & Accounting North America.
"A lot of people just put all their receipts into a shoebox and don't differentiate between them at all," Luscombe says. "It saves you a little money to have this organized so you aren't going into your tax expert and dumping a pile of receipts in front of him."
Paperwork that filers often don't hang onto but should includes receipts for educational expenses, so definitely keep Form 1098T if you want to deduct higher education expenses. And you need detailed proof for charitable deductions, too -- you can't just claim that your old shirts were worth $500 each. (Also, moldy doesn't equal "vintage.")
Cutting down on the endless wad of papers needed for a tax return should speed things up -- a welcome development since, according to the IRS, Americans spend an average 13 hours preparing our returns. And once my 1040 is done, I'll need one more favor from my groundhog: burrowing through the snow so I can get to the mailbox.
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