Now that your taxes are completed and filed, it’s a perfect time to clean up your paperwork and get organized for this year. By being organized, the task of completing your taxes for 2015 will not be so overwhelming. Here are some suggestions:
1) Make sure your tax returns are in a safe place where you can easily locate and identify them. According to the IRS, all tax returns and documents supporting these returns need to be kept for a minimum of three years. The IRS can audit your return during this period and if they find an error, may audit for six years prior. Accountants will recommend you save your returns, along with the documents that support them for seven years. To reduce clutter, you should shred your returns prior to the seven years.
2) Prepare folders for receipts and statements that support your income and expenses for this tax year. Separate folders for charitable donations,medical and dental bills, prescriptions, investments, bank statements and credit card statements will allow you to easily find them, thereby reducing stress in your life.
3) If you would like to “go paperless,” there are online storage programs where you scan and file your documents into folders using a cloud-based filing system. There are many available that are very secure, easy to use and charge a nominal fee based on your storage needs. These systems allow you to share files with others and access them whenever you want. It’s imperative to have a secure, reliable back-up system for all your computer files. There are many cloud-based programs available which back-up automatically and charge an annual fee. Or you can back-up to an external source. If you choose this method, it should be done daily or weekly and kept in a secure place.
For all of the above and any other daily money management needs, Files In Order is here to help.