You have an extra day this year to get your tax documents filed. Hopefully you’re not still scrambling to get them buttoned up! Once you’ve signed off on your returns, there are some tweaks you should make to your filing system to keep things current. Here are some suggestions:
- It’s important to keep your most current tax return in your file system for easy access in case you need it for anything. You should still have your 2010 return handy, so now you can replace it with the new 2011 return.
- Any of the back up data for your returns can be archived. This means that documents pertaining to your tax return do not need to be kept as accessible. We often suggest that our clients file bills etc. chronologically, this way, you can archive a box for each year and keep your tax documentation and any other applicable papers in that box.
- Check out the Chaos To Order Retention Document for some general guidelines on how long to keep certain papers. It’s always a good idea to check with your accountant based on your particular needs when it comes to knowing how long to keep any important papers.
- If you keep boxes in chronological order in long term storage, now is the time to toss one old box. For example, if you keep 7 years, when you add the 2011 box, you can shred the 2004 box. Just make sure you pull out the permanent paper keepers like your tax return, property documents etc…
While you’re in the mode of getting these important papers in order, it might also be a good time to go through some files and do some editing so you can make room for more of the incoming in the year ahead. Of course, the professional organizers of Chaos To Order are always happy to help with that job!
Guest Post by Paul Kaufmann of Shred Spot:
Tax time is over, but now you’re wondering what to do with all of those old files, receipts and other sensitive documents. They take up needed space but throwing them out is not a good option. We’ve all heard the stories of theives rummaging through garbage cans and dumpsters looking for personal information to steal. If you buy a personal paper shredder it could take hours or even days to shred all of the papers. Looking for a better solution? Use a commercial paper shredding and recycling company like Shred Spot.
Shred Spot charges $.45 per pound for the first 100 pounds and $.35 per pound thereafter. The shredders they use are very powerful and can tear through staples, paper clips and binder clips, as well as cd’s, credit cards and floppy discs with no problem. All of the paper, cardboard and metals are recycled. Shredding companies take your shredded paper, mix it with other shredded paper (this also helps with security) and then bale it into 1,000 lb to 1,800 lb bales which are then returned to paper mills to be converted back into recycled paper. Each ton of paper recycled saves 17 trees!
Shred Spot can take care of all of your document destruction needs. You can drop off papers at their Northbrook location and see them get shredded or they can pick up at your location (north side of Chicago through the north shore and northwest suburbs) for a $25.00 fee. Just call (847)291-0100 for an appointment. They are open 9:00-5:00 Monday through Friday and Saturdays by appointment but please call first. Don’t forget that no matter the color of your papers, the shreds are always green!
For our clients in the Atlanta area, we recommend I-Shred
It’s the first of March and the inevitable deadline is now lingering. If you haven’t done so already, it’s time to get your tax related documents together. Here are a few tips to help you navigate through the chaos:
- Keep all important tax related documents in a file labeled 2010 taxes. After filing, keep your return in this file permanently.
- Resist the rapid refund urge. Instant refunds are really short term loans and they’re expensive.
- Invest in accounting software such as Quicken. It’s an easy way to categorize income and expenses. There is even a free online version.
- Don’t spend too much time shuffling through piles of paper, the internet has made it easy to track down missing statements and forms.
- keep a yearly charitable contributions file and save every receipt from donations made. If your records aren’t organized, you can miss out on important deductions.
- Here is the Records Retention Schedule our organizers use to help determine how long to keep documents. But always defer to your accountant’s recommendations first.
- Get a good system in place for 2011 now. Create files by following what you had categories for in 2010.
Of course, Chaos to Order can help you navigate through your sea of tax receipts and help put things in order.
Today is April 15th, hopefully by now your taxes are filed and finished. Use today as an opportunity to weed out the old and make room for new files and papers. Get everything related to your 2008 taxes together and place them in a bankers box labeled 2008. Hopefully by now you have created 2009 folders and papers are accumulating in them. As you use the files and they grow through the year, you are going to need to make room for incoming papers. Getting 2008 out will open up some needed space. I suggest archiving the past 7 years paperwork in bankers boxes. After 7 years, throw away all of the documentation and keep only the tax return. For specifics on what to keep and what to toss check out our Records Retention Schedule. Spending time on having a good system to keep the paper flowing is a worthwhile investment. When papers have a lifespan and you know how the system flows, it’s so much easier to find what you need when you need it.
Every year around this time we receive desperate calls from clients asking us to come and help them sort through papers and get tax documents in order. There are a few simple steps you can take to make it a little easier. First, have a single spot where you deal with paper, mail and receipts. Next,keep a file handy to throw tax deductible receipts into, if it’s in the back of a stuffed file cabinet, it’s too much work. Filing receipts and papers needs to be easy, a good system is essential. Now you may look at the system you have and feel overwhelmed. Instead of feeling like you need to start a major task in order to get a system in place going forward, just get a simple file crate and start there. As you find time and motivation, you can take a couple file folders at a time and weed out the drawers. Another thing you can do to help keep track of your receipts and tax related documents is make sure you only save what you need. If you keep too much, you can’t find what’s really important. When saving receipts, first create some parameters. Is it tax deductible? Will you need it in the future? Might you return this item? If not, you can toss it. Another must is a yearly tax file. Create a 2009 tax file now. Keep forms and important tax related documents in it. Use a separate folder for tax deductible receipts. Depending on how many you have, you may want to make categories. If you deduct most of the receipts and bills you pay, you may want to make files labeled January – December 2009. Tax time, like any other organizing project takes well thought out systems and good maintenance habits. Follow these ideas and preparing your taxes will be much simpler and less stressful.