When you get around to cleaning, don’t forget the paperwork. Since tax time is when we’re often sifting through paper, it’s also a good time to spring clean your office and desk:
1. Shred what you shed.
If it’s got personal information on it – your name, address, Social Security number, and anything else you wouldn’t want potential dumpster-divers to see – you should shred it. Scissors can work, and so can simply ripping it up, but if you’ve got lots of paper to trash, a shredder is a good investment, which can cost you less than $40.
Identity theft is a big concern. Shredding anything with potentially useful information is one way to protect yourself
2. Throw out the obsolete.
Here is a short list of items to discard:
- Old utility statements
- Reconciled bank statements and ATM slips
- Reconciled credit card statements
- Old receipts and cancelled checks (unless they’re needed for taxes or proof of purchase for warranties)
- Instruction manuals for things you know longer have
- Expired warranties
- Expired insurance policies
3. Plan short, medium, and long-term.
Some paper will be with you for life including
- birth and marriage certificates
- divorce, adoption, and immigration paperwork
- legal documentation, including powers of attorney, wills, titles, deeds, and contracts
- car titles
If you are able to scan and keep them in an electronic form, all the better
4. Think taxes.
Anything that provides support for a tax-return should be kept for at least three years after the return is filed; three years is typically how far back the IRS goes when auditing. Simply look at the deduction you took and you’ll know what to keep: receipts for home office equipment, professional dues, and business-related travel and entertainment expenses, as well as retirement account contributions, donations, medical expenses and deductible interest, and mortgage and property tax payments.
5. Don’t duplicate what’s digital.
If the goal is to have less clutter, take advantage of inline services. Bank, insurance and investment companies, usually offer your statements online. If your online history is available, there’s no need to keep identical paper statements at home.
6. Digitize your documents
What about the important documents companies don’t keep online for you? An inexpensive scanner can cost as little as $55 and will let you keep PDF versions on your computer, which you can e-mail or print as necessary. Be certain to maintain backups which you can do that with a USB drive, CD, or external hard drive. Or you can use an online “cloud service” where you can access the files from any computer later.
Please do not hesitate to contact Brad or Ann with any additional questions that arise.