Tax season is upon us, and its time to dig out those receipts, torn invoices, and dusty W-2s and take them to your nearest tax specialist or CPA. While tax season comes every year, it feels like there is no easy way to get through your taxes.
So, is there a better way? Keep reading to learn more about how you can prepare for tax season.
Ditching Documents
While it might seem crazy to shred an important document, clearing out the clutter can be an easy way to get your taxes in order. Thankfully, you can get rid of tax documents depending on when they were filed.
The general rule of thumb is to keep all tax information for seven years. While it is good to keep them in your records for several years, not all documents need to be kept for that long. In fact, you can shred W-2s, pay stubs, 1099s, and brokerage statements after one year. Be careful to avoid tossing out current documents, but if you have a W-2 from a couple of years ago, you can dispose of it.
All K-15s, canceled checks, charitable donations, and other information can be thrown out after three years. These documents are important to keep for a little while but holding onto them forever will only make finding the current documents harder.
If there was an error during filing and you fail to report more than 25% of your gross income to the IRS, you must keep all tax documents and forms for six years. If you have not been audited after the six-year period, you are probably not in danger of an audit. However, its crucial that you accurately report your income to avoid snafus in the future.
At the seven-year point, most tax filing records, and retirement account information can be tossed. You can also pitch losses from securities and bad debt deductions. After 10 years, you can throw away almost all tax documents. The statute of limitations for IRS audits is a decade, so you can safely shred 10 years’ worth of tax filings and start fresh.
Keep It Accessible
It is hard to stay organized when your information is not in one place. One way to keep yourself ahead of the tax game is by consolidating important documents into a digital archive and/or having them professionally printed.
For businesses in particular, documentation is key but keeping track of it all is easier said than done. With a digital document archive, you can access all important documents and financial statements in one place and secure them with data protection. Once you have a digital archive, you can continue scanning in documents, including tax filings, and organize them in searchable PDF files. This way, you can save time and money while filing your taxes with ease.
Safety First
Sensitive documents like tax filings should be kept safe. A worn accordion folder is not a great way to secure your financial information. To ensure that your information stays safe, you should consolidate it and/or upload it to an encrypted digital library.
Whether you choose to use a digital archive or a physical copy of your information, it is important to keep it minimal and organized so documents do not get lost or fall into the wrong hands. Binding your tax returns, getting documents scanned into an archive, or shredding outdated documents can help you keep sensitive information safe while ensuring that it is at the tip of your fingers for tax season.
Tax Season Is Here. Are You Ready?
If you want to put the tips listed above into practice, contact Acro Photo Print Inc. We offer a full range of printing, binding, scanning, and shredding services in addition to helping our clients build a digital archive. We assist legal firms, businesses, and individuals with their document printing and storing needs so they can proceed with confidence.
Contact us to find out more about our services!