January is a month for reflection on the year gone by and resolutions for the year ahead. In January, more than any other month, we consider where we are going and where we have been, and we reflect on who we are and who we want to become. Whether the subject is spiritual growth, personal health or record keeping for taxes, we take out our yardstick in January to measure our success.

Unlike other goals, which can always be pushed forward another year, failure with your goals to keep your tax records organized means January is also a month for pulling together information that has floated on good intentions for the past year. The only thing worse than filing your tax records during the year, of course, is sifting through your papers in January.

Still, better January than March. For the sanity of your accountant, and the comfort of your wallet, sit down and organize your receipts now before you start getting annoying phone calls and threats of extension. It doesnt even have to be painful. Pour yourself a stiff eggnog, pull out last years return, and get started.

Use your 2002 return as a guide for the information you will need to pull together. Go through the return to determine whether you will receive a statement for the amounts or you will need to glean the numbers from receipts and checking accounts, and make a list. You will receive statements for wages, interest and dividends, capital gain distributions and mortgage interest, as well as for partnership, LLC and S-corporation income.

Check these off your list as you receive them. Other items, such as charitable contributions, auto excise tax, real estate taxes, self-employment income and expenses, and rental real estate income and expenses, will have to be gathered from your records.

Capital gains from the sale of stock may or may not be reported by your broker. If your statements report only the proceeds from the sale of stock, you will need to get basis information, as well. This often can be as simple as a call to your broker, but you will need to find records of the original purchase if the broker doesn't have the basis.

If you receive an organizer from your tax preparer, you can use the organizer instead of last years return to determine what you need to provide this year. The organizer can be particularly helpful both to you and your preparer if you use it when you have self-employment income and expenses or real estate income and expenses.

Include documentation when possible but no originals, please. Necessary documentation includes all statements received, checks for estimated payments made, letters of acknowledgment for contributions over $250, and settlement statements for the sale of real estate.

Finally, dont forget to tell your accountant about any major changes in your life Did you have a baby or adopt? Did you marry, divorce or separate? Did you make any major gifts, set up a trust, move or change jobs? Did you buy or sell a house? Start a home-based business? Win the lottery?

Include all relevant information in the package you send your accountant such as Social Security numbers and dates of birth for any new members of the family, and income and expenses from your wildly successful new business and you can prevent those pesky phone calls.

This tip contributed by:

Susan K. Day, CPA

Gray, Gray & Gray, LLP