Paper Organization Challenge – Day 9: How to Organize Tax Documents
April 15 is less than 7 weeks away! Are your tax records in order? If not, no worries – today’s Paper Organization Challenge offers a simple solution:
We’re going to set up a filing system based on the premise of keeping tax records for a period of 7 years. Note: Please check with your accountant regarding any requirements relating to your personal situation.
Supplies you will need:
- 12 hanging Pendaflex files – labeled January through December.
- 1 file or file pocket (like the one shown here on the left) labeled Tax Returns.
- 7 files labeled for each of the last 7 consecutive years (these may be hanging files, file pockets or even individual boxes depending on the quantity of tax records to keep).
Here’s what you do:
- Keep a copy of your actual annual returns in the file labeled Tax Returns. Mark this file “do not discard.”
- File all supporting documentation by year. Supporting documentation is any document that corroborates a tax deduction taken (receipts, bank statements, etc.) Now, each year when you file your annual return you can simply send the 7 year old file to the shredder. Again, please check with your accountant regarding any specific requirements relating to your personal situation.
- Use the folders marked January through December to file monthly receipts and documentation for the current tax year not yet filed. This method will help immensely with monthly bookkeeping!
Hi, I’m Kim Cossette Andre, owner of The Organized Approach. I work with busy, overwhelmed women, just like you, who strive to be organized but simply need a helping hand to get there. Ready to tackle your organizing goals? Schedule a free call!
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