Clients ask me all the time: what receipts do I need to keep? Why do I need to keep them and where should I keep them? Here is a guideline.
Home Receipts: I subscribe to an email newsletter from Laura Leiden, Realtor with Keller Williams. Her most recent newsletter explains why every homeowner should hold onto repair and improvement receipts. Here is a copy of the newsletter.
Homeowners are familiar that they can deduct the interest and property taxes from their income tax returns. They also understand that there is a substantial capital gains exclusion for qualified sales of up to $250,000 if single and $500,000 for married filing jointly. However, ongoing recordkeeping tends to be overlooked.
New homeowners should get in the habit of keeping all receipts and paperwork for any improvements or repairs to the home. Existing homeowners need to be reminded as well, in case they have become lax in doing so.
These expenditures won't necessarily benefit in the annual tax filing but may become valuable when it is time to sell the home because it raises the basis or cost of the home.
For instance, let's say a single person buys a $350,000 home that appreciates at 6% a year. Twelve years from now, the home will be worth $700,000. $250,000 of the gain will be exempt with no taxes due but the other $100,000 will be taxed at long-term capital gains rate. At 15%, that would be $15,000 in taxes due.
Assume during the time the home was owned that a variety of improvements totaling $100,000 had been made. The adjusted basis in the home would be $450,000 and the gain would only be $250,000. No capital gains tax would be due.
Some repairs may not qualify as improvements but if the homeowner has receipts for all the money spent on the home, the tax preparer can decide at the time of sale. Small dollar items can really add up to substantial amounts over many years of homeownership.
The important thing is to establish a habit of putting receipts for home expenditures in an envelope, so you'll have it when you are ready to sell.
This article recommends keeping the receipts in an envelope. An envelope is fine if you have a very small amount of receipts. I recommend a file jacket: An enclosed file so receipts do not fall out.
Depending on how many different types of improvements were made will determine how many file jackets or envelopes to use. For example: Bathrooms, Kitchen, Garage, etc. Another storage idea is a binder with sheet protectors to sort home receipts by project. However, if you want/need super easy one file jacket, drawer or envelope will do the job. The important thing is to keep the receipts.
You do not need to keep service repair receipts on appliances for taxes but you do want to keep them for the warranty period.
Tax Receipts: Note there are huge changes to the tax code and it may not benefit you to keep some of these. Check with your own Tax Advisor for what to keep and how long. Keep in a folder labeled Taxes and the corresponding year.
Electronics, Appliances, Furniture and other Big Ticket Item Receipts:
If you want super simple have 1 folder titled Big Ticket Items or whatever you would think of to find these receipts but I would recommend 5 folders for this category: Electronics, Large Appliances, Small Appliances, Furniture and Big Ticket Items.
Inventory these items. If your house burns down you will need to claim and prove that you owned these items and provide a valuation to your Insurance Company.
One of my friends and ex-colleagues, Julia Marlowe, has her own Inventory Business: Athens Home Inventories I highly recommend Julia if you want to hire someone to do this for you.
Auto Repair Receipts:
Keep these for proof of maintenance. Some Auto warranty programs require it. It’s also good to have a record of all repairs and service.
Clothing & General Shopping Receipts:
I hope this article is insightful and helpful. If you find it helpful please share it. Anyone can sign up to receive my e-newsletter by clicking this link or visiting my website and scrolling down to the sign up link.
Chief Executive Organizer
Simple Solution Organizing LLC
I'm in the spring edition 2018 Connections magazine: an Athens Georgia magazine.
The above article is about Rightsizing. Downsizing is all the rage but what everyone should think about is: what is right for your particular situation. This article is thought provoking; it really made me think about my own situation. My husband, Karl, and I have 2 children: our daughter is 22 living in New York City and our son is 15 in 9th grade and has 3 more years of High School. Karl and I are already looking at smaller homes online and talking about our future living situation. After reading this article I am going to rethink everything.
I want to have room for my children to visit and be comfortable when they visit. I love my children and want to spend as much time with them as possible. Our families do not live near us and we enjoy hosting them when they visit from California and Iowa. If we downsize they would have to stay in a hotel. Many of you may prefer family to stay in a hotel….
Things to consider: Grandchildren, extended family, Property Taxes, size of home, upkeep of home, stairs, proximity to grocery stores, location location location, proximity to friends and activities you enjoy, your age and health. You don’t have to downsize unless you want to. However, getting rid of clutter and items that you never use is always a good idea. Rightsizing is what’s right for you.
Our best friends recently sold their beautiful home off of Timothy and moved into a much smaller home in 5 Points. They always wanted to live in 5 Points. They have 3 children in school so the thought of downsizing was a difficult decision. They moved and they are so happy. They can walk everywhere; best of all UGA Football games.
The more I ponder about downsizing the more I think the size of my home is right for us and probably will be for many years. Our home is 3,400 square feet including a 1,000 square foot finished basement with private access that we rent out on Airbnb. It’s not a huge source of revenue nor is Watkinsville a huge tourist attraction but we do rent out for all the UGA Football home games. Having a private space with a bedroom, bathroom, and living room is great for out-of-town family and friends. So, maybe we won’t want to sell in 3 years when our son graduates High School...but we still might want to. Don’t hold me to it.
Chief Executive Organizer
Organizing products and containers can be useful just like exercise equipment and cleaning products. However, it is easy to fall into the allure of the marketing that if we purchase one of these items it will somehow do the work for us. We know it won’t do the work for us but we really want to believe that it will make the task so much easier and we won’t mind doing the work, if we own a pretty thing-a-ma-jig. Sorry… bad news, reality check, it takes work to get organized, to get in shape and to clean your home. Products, containers, and equipment can help but if we don’t put in the effort nothing will change.
I often see organizing products siting in a corner of a client’s home collecting dust. In addition to products and containers there are several books on how to get organized at most of my client’s homes. Wishful thinking is just that thinking; organizing takes action, it takes maintenance, it takes effort. Let’s talk about what you can do to get better organized at home.
The first step is determining what areas you want to work on. Let’s use the example of a kitchen pantry. Common problems include locating items, buying duplicates and overcrowding overstuffed shelves.
When you are ready to tackle the project it works best to take everything out of the pantry.
If you are ready to tackle an Organizing or Downsizing Project and want a little assistance give me a call. I would love to help.
Do you subscribe to magazines and newsletters? You keep getting bills and offers but you seem to remember paying the subscription. Look for the expiration date on the address label. Sometimes it is listed, if not, inquire with the customer service department and find out when it expires before sending in another payment. Several of my clients have paid up 5 to 7 years in advance.
Many magazines like TV Guide also use 3rd party companies to market for them. So you may be paying multiple companies for the same subscription. Yes, they will add time to your subscription but do you really want to be pay 7 years in advance?
Do you have elderly parents or parents with Dementia? If they will let you, check on their subscriptions. I recommend calling the company and ask them to stop sending out offers and renewals. Unfortunately there is no guarantee that they will stop or that you can find their contact information. I have searched for phone numbers and even sent letters and some get sent back because the company has moved. It is very frustrating.
I recommend creating a file titled Subscriptions or a Note on your phone and list all of your subscriptions, account numbers, and expiration dates. Remember to update them every time you renew or purchase a new subscription.
Simple Solution Organizing LLC
Do you know what type of rewards your credit card offers? If not…find out. Are you getting the rewards you want and deserve? I only recommend credit cards if you can pay the balance off every month and pay it on time. If you pay a credit card late you will owe $35 or more in late fees and you may lose all of your reward points. Credit cards are not always the best choice depending on your financial situation and your propensity to pay bills late.
However, credit cards can be a great financial asset. My credit cards offer cash back for my rewards program. These cash rewards add up to a lot of money and pay for most, if not all, of my family’s Christmas gifts. If you travel a lot then you may want a travel rewards credit card. There are so many different types of rewards. Credit cards offer great benefits too. They often provide buyers protection for items that you purchase and Rent-a-Car insurance. Read the information that comes with your card or call to find out all the benefits that are part of your credit card.
Research the best card for you by how the card accumulates points. You want to be able to accrue as many points as possible. My card, American Express, rewards the most points 6% for groceries 3% on gasoline and 1% on everything else. It would not behoove me to have a card that gave me the most points for flights because I don’t fly very often. My card has a $95 annual fee. American Express offers a card with no annual fee but the point structure is lowered. So find the best card for you. It is well worth the time and effort.
Chief Executive Organizer
The Harsh Reality of Getting Rid of Stuff is that it is increasingly getting harder and harder to find someone to sell, give, or donate to. You may have to pay someone to take your stuff away. Yes, you read that correctly and it is difficult to digest. All of my clients struggle with letting go of items. Now the task is even more arduous because some non-profits have stopped accepting donations; they are completely full. Most people believe their possessions are very valuable. They may have been at one time but our items are only worth what the current market is willing to pay.
The October meeting of NAPO GA, National Association of Productivity & Organizing Professionals, discussed the topic of how to get rid of stuff for our clients. I was really surprised to hear that many donation centers are completely full and not accepting donations in Atlanta. WOW, you can’t even give your stuff away! Luckily, I have not experienced this problem in Athens, Georgia. There are many more options available which can make this process confusing; I’ll share some with you.
Baby Boomers are donating items in droves. According to an article in the October AARP Bulletin entitled, I’ve Got The Old Piano Blues, “Pianos often have a substantial amount of emotional value to their owners, so it can be difficult to accept that many pianos do not have meaningful value on the open market.” “Used pianos have flooded the market.” This is true for most items not just pianos. It’s not just the amount of pianos in the secondhand market. People are purchasing less expensive digital pianos. The article describes what so many people go through when they attempt to find a good home to donate their items. They called churches, schools, friends, and charities with no luck. They eventually did find a friend to take the piano. Otherwise, they were going to have to pay $300 to have it disposed of. Everyone I work with wants their items to be used again; someone has to want it, right?
There are collections of items that are very valuable. Here are a few popular resale items according to “Got Stuff, See Resale Value of Used Items from Your Apt”: Comic Books, Toys, Vinyl, Vintage Books and Magazines and some Collections. Not sure if your items are valuable or not, do some research on sites like bonanza and/or ebay to find out. You can also hire a Professional Appraiser.
While listening to NPR, National Public Radio, Marketplace Show on October 17, 2017 there was a story entitled China’s Done Doing Our Recycling. Guess what? It’s likely to end up in storage until the United States can find something else to do with it. Imagine that our recycling going to storage….
Storage units are a growing business and I wish I had invested years ago. So many people have storage units. I always ask my clients, WHY are you considering a storage unit? If they answer with, “these items belonged to my Great Grandmother, I have to keep them,” I tell them “No, you do not have to keep them.” Do you really want to pay $150 a month for the rest of your life? If you do not have a solid plan to use the items going into storage within 6 months to a year then try to sell or giveaway the items.
Are you Downsizing anytime soon? Simple Solution Organizing LLC can help. Give us a call.
Chief Executive Organizer
September 11, 2017
We are in the midst of weather chaos; Hurricanes and Wildfires causing massive destruction. Our thoughts and prayers go out to everyone affected by these tragedies. Disasters make us think about what is really important in life. If you lived in Houston would you have been prepared? I can definitely say that I am not fully prepared. Here is the short list: Do you have the proper insurance, do you have photos and other memorabilia saved in digital format, do you have vital records scanned and saved in a digital format, do you have a list of all of your insurance policies, credit cards, bank accounts, investment accounts and other important items saved digitally, is your hard drive backed up to the cloud, and do you have an inventory of your possessions; if you need to file an insurance claim? I can answer yes to some but not all of these questions. It's not just having them saved digitally but saving them in the cloud. If you have them saved on a Jump Drive and that is destroyed then it defeats the purpose.
I highly recommend saving photos and scanned copies of vital records to a cloud based account such as:
There are so many choices! How do you choose? Here is an article, The Best Cloud Storage and file-sharing services of 2017, by PC Digital Magazine that can help you decide. If you worry about your files being secure... well, there are no guarantees in life. Equifax was just hacked into; everything is a risk, doing nothing is a risk. Don't forget to back up your computer hard drive too. I use Carbonite and it backs up everything automatically.Here is an article about the best backup software to use. I may want to switch because Carbonite is not listed.
If you want to learn more about protecting your treasurers, Organize for Disaster, is available at Amazon. Disasters strike in many different forms. Don't keep telling yourself, "it won't happen to me," because it might.
Chief Executive Organizer
Simple Solution Organizing
It’s hot outside, 90 degrees in Athens today. If you are spending more time indoors then why not spend it organizing? When is the last time you organized your address book (paper or digital), business cards, files (digital and paper), junk drawer, sock drawer, kitchen, craft area, photos, wrapping paper, book shelves, basement, attic, garage and much more?
A few years ago I challenged my Newsletter readers to organize 1 particular area of their home or office each month and I want to bring that back. Are you up for the challenge?
I challenge you to organize your address book(s) this month. All of your address books: paper and digital. You may have multiple books for different areas of your life:
Contacts in your address books need to be organized in a way where you can find the information you are looking for. As you can see in the list above it can get complicated quickly. I certainly can’t remember the names of every person I associate with or have done business with. It is imperative that I organize my address book in a logical manner for me. I no longer use a paper address book and I’m sure many of you do not either.
How to Organize an Address Book (paper and digital):
If you decide to play along and actually organize your address book this month….or in the next few months I would love to hear from you.
Tidy Home, Tidy Mind. Your physical environment has a profound effect on you, physically and emotionally. Clutter in your surroundings can cause you to feel overwhelmed and tired, even depressed. If you’ve ever spent time you could have better used elsewhere searching for something in a pile of papers, a crammed closet, or a disheveled drawer, you know how frustrating it is to deal with clutter.
Here are several good reasons to be more tidy.
Benefits of Being Tidy
This is an article printed in the Spring 2017 MetLife Life Advice newsletter. Their source is Marie Kondo’s book: The Life Changing Magic of Tidying Up.
If you are struggling with de-cluttering your home or office we can help.
I want it to be perfect. I can’t….won’t get started until I have enough time to make it perfect! I have to wait for XY and Z to happen before I can get started on organizing my home. I hear these excuses regularly. I know people that never get started on a project (organizing an area or room(s) in their home) because they don’t feel that they have enough time to complete it perfectly. I can assure you that perfectionism has no place in organizing, especially if it is holding you captive from progress.
Perfectionism is a very different excuse than procrastination and both are stifling. The definition of perfectionism according to Dictionary.com is: A tendency to set rigid high standards of personal performance and the demand for the highest standard of excellence. Procrastination is the act of delaying. Both of these excuses keep people in a state of stagnation.
My advice is to just get started. Nothing is perfect! If you think you only have 15 minutes to devote to the project…just get started. How do you get started? Great question. It depends on what you want to accomplish. Set a Goal and don’t make it too ambitious. A good goal: I will organize my living room in 1 to 2 days and donate items I never or rarely use. I want to do this so I can invite friends and family over and not feel ashamed. An over ambitious goal: I will organize my entire house in a weekend. When you set a goal for yourself you can continue to go back to it to keep yourself accountable. Halfway into your project your negative thoughts may creep in and try to sabotage your efforts.
How to get started. This applies to any room in your home.