Try a Weekly System for Tax Time Organization

tax form organizer

Organizing your taxes doesn’t have to occur just once a year. With the right organization system, tax-related documents can be neatly and quickly organized on a weekly basis. Tax time will be less hectic as all your paperwork will already be in place!  Using this tax document organizer ,you manage all your papers throughout the year. Here’s how to use it:

Create Main Categories for Tax Paperwork

Make a list of all the papers you will most likely accumulate over the year related to your taxes. Create manageable categories or buckets, as daily, weekly or monthly documents will be tossed into these categories. Here is an example:

  • Income (including documents received from third parties, such as form W2s and form 1099s)
  • Medical documents
  • Donations
  • Child care costs including daycare
  • Business or professional deductions
  • Tax correspondence (with IRS or state officials)
  • Student loan payments
  • receipts for other deductions
  • Payments of tax made throughout year (such as for quarterly estimated taxes, etc.)

Set Up the Tax Document Organizer in Your Home Office

Label each of the compartments of your organizer, and as documents need to be filed, insert them into the appropriate slots, every day or every week. Come tax time, all your paperwork is already organized.

sorter

Create an Organizer Just for Receipts

If archiving receipts over the course of a tax year is your biggest organizational hurdle, then setting up a sorter just for receipts is easy. No more digging around in the file cabinet for a wrinkled business lunch expense. Select a smaller sorter for this task and organize your categories of receipts in areas such as the following:

  • Medical and dental expenses that exceed 7.5 percent of your adjusted gross income
  • Deductible taxes you paid elsewhere (including state, local and foreign income tax, property tax, sales tax, etc.)
  • Home mortgage points
  • Charitable contributions
  • Casualty and theft losses
  • Certain education and work-related expenses
  • Miscellaneous deductions – some, like unreimbursed employee expenses, professional dues, job search expenses and tax preparation fees, must exceed a combined 2 percent of adjusted gross income to be claimed; others, like gambling losses up to the amount of winnings or casualty/theft losses from income-producing property, are not subject to that limit.

Why Accountants Need To Review Their Shredder Policy During Tax Season

shredding during tax season

Digital identity theft is the primary concern for most business professionals, including accountants. Yet during tax time, strategic dumpster diving is a common technique used by identity thieves. Focused on dumpsters behind office buildings where accountants and tax preparers conduct business, identity thieves rely on the hectic busy season to create lapses in document-based identity theft prevention.

Shredding Policy Basics

  1. Ensure all employees know what documents must be shredded. Create a list of key documents as reference for all employees.
  2. Shred all documents during working hours. Avoid leaving slush piles of paper to shred while not in the office. Cleaning crews may accidentally toss these papers if they appear as trash.
  3. Ensure shredder bins are emptied regularly. When employees are busy, full shredder bins often lead to documents being set aside to be shredded later, only to be discarded as regular trash.

Choosing a Shredder for an Accounting Office

Select a paper shredder that accommodates the size of the office.  Large, commercial shredders are ideal for any size shared office as they require less frequent emptying. Small office shredders placed by employee desks work well too. Automatic shredding is the latest in shredder technology and allows documents to be safely destroyed even after office hours with computerized settings. Learn more about Automatic Shredding

Make sure to use cross-cut shredders. Strip cut shredders are okay for households, but do not provide adequate document destruction for businesses. Cross-cut shredders grind documents into 5/32” x 1-1/2” cross-cut particles.(Security Level P-4).  For greater peace of mind, consider a micro-cut shredder.

Learn more about shredding security levels

Lax  Tax Document Destruction in the News

 

Twelve Flexible File Storage Categories for Your Small Business

 

Categories for File Organization

Records storage may seem an incidental part of your small business operation. But flexibility in records management plays an important role in the scale of your business.  Just think of the smaller space of your offices and how a sudden surge in business means more paper records and the need to fill up your limited space with bulky filing cabinets. File boxes offer a more flexible option, as they can be stacked, stored and transported quickly and easily as your business needs change. Providing a box for each category of your business paperwork also creates a self-contained and highly organized file that can moved to a back office or to off-site storage with ease.

Here are twelve box categories to keep your business nimbly organized.

Accounting

Create and fill this box with sales and expense info including balance sheets and cash flow statements.

Banking

This box contains cancelled checks, bank statements, deposit slips and loan documents

Contracts

Keep all of your business contracts in this box including those for equipment leases and purchase agreements. You may also include work-for-hire contacts joint venture agreements.

Corporate Documents

If your business is incorporated you will need a box for articles of incorporation, bylaws and shareholder records such as minutes and consents.

Business Forms

This box is specially essential for accountants and attorneys who use standards forms daily. You may want to include sales agreements, tax forms, purchase order forms and employee applications here.

IPO

If you work with intellectual property, even on a small scale, you need to stay organized. A box containing trademark applications, patents,  licenses and non-disclosure agreements go in this file.

Marketing and Advertising

If you are promoting your business, you will need to keep records of your marketing brochures, past ads for print and web, press releases and other materials.  You may need to refer back to this file as you continue to market your company to see what produced the best ROI.

Permits and Licenses

The documentation to operate your business needs its own file. Use this box to keep operating permits, business licenses and other documents that you may need quick and easy access to for legal verification.

Three Easy Steps to Year End Records Organization

bankers box year end organizing

As the new year approaches, tax time may be the only thing on your mind, but taking the chance to reorganize can help you feel more in control and ready to take on your taxes. Here are three steps  you can take to get yourself organized and ready for 2017.

Review the complete line of year end storage solutions: Storage Boxes for Year End Organization

Purge

Files becomes disorganized mostly because we are afraid to throw things away. To make this step easier, make two piles-definitely throw away and maybe throw away. Any files 7 years or older can be thrown. If you are not sure about a particular document, keep it in the maybe file for now.

Restructure

The structure of any file system is not set in stone. We all have special areas of our business that need files and no set template is going to be completely satisfactory. After the purging stage, your current filing structure may be just fine. However if you do need to rethink your system here are some questions to ask yourself:

 Are Current File Categories Growing too Big?

For example you may have started a file entitled employees, only to find that current employees and past employee records were making the file too massive. Breaking down a single category into sub files can take the burden out of one file.

The same question can be asked in reverse. Are there some sub-category files that you thought would grow, but may only contain a few documents. You may want to merge this file with another smaller category to keep things  from getting too complex.

Remember that maybe throw file? Go through it now to reconsider the documents you may want to keep. In light of a new file structure, some might get filed in new categories or simply tossed once see with more organized insight.

Archive

Finally, it’s time to archive your files from around two years ago. Clearly label your boxes or drawers with the date.  Leave out last year’s documents to get ready for tax time. You will feel a sense of relief knowing you are not only ahead of the tax season, but also completely organized before the first Christmas party invitation.

 

Why Businesses Are Upgrading to Automatic Shredders

With government regulations demanding compliance with identity protection guidelines and an increase in high volume shredding, companies are seeking new ways to improve productivity of the shredding process with automatic paper shredders.

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Many businesses choose off-site shredding companies as a convenient solution. However with this hands-off service, comes a few drawbacks including high prices and a risk of exposing confidential information to an external vendor.

Many businesses instead are using automatic on-site shredding. The single cost purchase of an automatic high volume shredder provides long-term shredding without the hefty service fees of shredding services. And an on-site commercial shredder keeps all confidential information in the office.

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Most importantly, auto feed paper shredders also provide a hands-free experience. Users simply load the bin, push the button and walk away. From a productivity standpoint, this means employees spend less time shredding and more time on other more important tasks. Another important feature are safety locks, which prevents the shredder from being opened after it begins the shredding process, so confidential documents remain safe until completely destroyed.

Automatic shredding also allows the shredding process to occur in a timely manner, eliminating the risky build-up of confidential documents waiting to be destroyed, making confidential shredding an important perk of automatic machines.

The value of automatic shredding spans across many industries that handle sensitive materials.

Healthcare

Medical clinics and hospitals can quickly destroy reams of sensitive patient information as medical records clerks purge old files in less time.

Law

Law clerks find automatic shredding useful for past client records or destroying the duplicate paperwork of a long case.

Finance

Accountants use automatic shredding to maintain a consistent storage and destruction cycle for business records. Large quantities of sensitive documents  are usually in immediate need of shredding, and the process can take accounting clerks weeks to properly dispatch such paperwork.

Real Estate and Mortgage

Credit apps from home buyers quickly pile up on a realtor’s desk, unfortunately a desk often left unattended while showing homes. Automatic shredding saves real estate companies time by allowing these documents, which often contain social security numbers, bank account numbers and driver’s license information, to be quickly shredded without delay.

Five Signs It’s Time for a New Paper Shredder

You’ve been putting off that paper shredder purchase for a while now, even though the one you have might be jamming, noisy, or filling up just too fast. Here are some options to consider when making a personal shredder upgrade.

different paper shredders

  1. Current Paper Shredder Needs to Cool Down Too Often

When you’re shredding and you see that red light, you know your paper shredder needs a break. You may need to wait awhile until the machine cools down and is ready to shred again. If you’re using an office shredder, this can take a lot of time out of your work day.

Select a paper shredder with longer run time. Here is one office shredder that will let you shred for up to 30 minutes.

  1. Current Paper Shredder Fills Up Too Quickly

When you first bought it, the paper shredder bin capacity was probably okay for your needs. Now you may notice that you are shredding more and more often. It seems like you do nothing but empty that bin. It may be time to get a paper shredder with larger bin capacity, just more room for more shreds.

  1. Current Paper Shredder Jams

You may put up with paper jams, for awhile. Eventually tearing half-shredded sheets out of the cutters tries your patience. Select a personal shredder with 100% Jam Proof technology and say goodbye to paper jams.

  1. Current Paper Shredder is Just Too Loud

If you shred a little, a noisy shredder is a nuisance. If you shred a lot, then it becomes an aggravation. End that endless whirring and grinding that drives everybody at home or in the office crazy. Get an office shredder or a personal shredder with quiet performance features like SilentShred.

  1. Shredding Takes You Away from Other Work

Disposing of large quantities of documents, especially during tax season, can mean endless time standing in front of the office shredder. However, new automatic shredders are available that allow you to simply fill the bin, push a button and walk away. The new AutoMax shredders perform this task, shredding crumpled paper, stapled paper and paper clipped paper just as easily.  The new AutoMax shredders come in large office shredders versions and small office shredder sizes to meet different shredding demands.

Tax Time Shredding at Home

paper shredder for tax documents

The hardest decision for many taxpayers organizing their records during tax season is determining what to shred. Here are some general guidelines to prevent your tax records storage from becoming a paper pile.

Bank Statements

Shred bank statements should for one year, unless you think  you may be applying for Medicaid. Many states require that you show five year’s worth of bank statements for Medicaid application. Check with your state Medicaid guidelines for keeping bank statements.

Credit Card Bills

Use your paper shredder to destroy credit card bills, unless you are using them to verify a purchase that is relevant to a deduction.

Old Tax Returns

Despite being able to amend your tax returns going back three years, the IRS has seven years to audit your returns if the agency suspects you made a mistake, and up to six years if you likely underreported your gross income by 25 percent or more. As a result, you need to hold on to your returns and all supporting documents for seven years. After that period, older returns can be safely destroyed using a home paper shredder.

Some tips for finding a personal shredder for tax time.

  1. For purging lots of old tax records you may want a shredder with longer run time, so you don’t need to wait for the shredder to cool down.
  2. Frequent shredding can mean more paper jams. Find a personal shredder with anti-jam technology to avoid the frustration.
  3. A shredder at home also raises the risk of injury, especially during tax time when the paper shredder is in frequent use. Make sure you find a home paper shredder with safety features to protect kids in the house for accidents.

Retirement Account Statements

Keep notices of any portfolio changes you make intra-month (or intra-quarter for some plans) until the subsequent statement arrives to confirm those changes. After making sure the statement is correct, you can shred away. One note: keep evidence of IRA contributions until you withdraw the money.

Financial Investment Statements

Brokerage and mutual fund account monthly statements/periodic trade confirmations (taxable accounts): Retain confirmations until the transaction is detailed in your monthly report. For tax purposes, flag a month where a transaction occurs, because you may need to access this information in the future. Otherwise, shred monthly statements as new ones arrive, but keep annual statements until the sale of each asset within the account occurs and for 7 years thereafter, in case you get audited.

Pay Stubs

Keep for one year and be sure to match them to your W2 form, before you shred.

Medical Records

Given how hard it is to deal with health insurance companies, you should keep medical records for at least a year, though some suggest keeping records for five years from the time treatment for the symptoms ended. Retain information about prescription information, specific medical histories, health insurance information and contact information for your physician.

Utility and Phone Bills

Shred them after you’ve paid them, unless they contain tax-deductible expenses.

 

Tax Time Solutions for Tax Preparers and Do-It Yourselfers

Tax pros and amateurs face some of the same barriers: handling confidential documents and staying organized throughout the whole taxing process. There are some solutions to make the process easy and safe.

Tax Pros

Even though many returns are submitted electronically, paper documents still play a role in the tax office. Paper based ID theft breaches for the first half of 2012 accounted for nearly 15% of known breaches. As you handle scores of tax returns with social security numbers and bank account numbers, having a consistently performing shredder available ensures the ID security of your clients.  In addition, a commerical paper shredder that is visible  to your clients and in use while you are preparing their taxes gives them a higher level of trust and confidence in you and the practice you run.

Do It Yourselfers

Tax time may also be a purging period of old returns–something id thieves are fully aware of. You make feel your current return is perfectly safe because you filed electronically, but those old returns carry the same confidential information that can fall into the wrong hands when you are disposing of them. A reliable household shredder can make cleaning out your tax records a lot easier. If you do a lot of shredding in your home office, consider a home office shredder for longer run times and shred capacities.

Tax Pros

Helping your clients get their documents done may not be the only way you can help. Consider offering them methods for long-term tax organization. Suggest a Tax Organization Kit.  It can help your clients keep records clearly organized throughout the year for easier processing during tax time–making their life and your job a lot easier.

Do it Yourselfers

Sometimes the worst part of the tax process if you do it yourself is remembering where you put this form or that receipt from eight months ago. A tax organization kit with flip top boxes and color coded reference labels can really help staying organized throughout the year. Without guidance from a tax professional, do- it-yourself organizational help can reduce the stress of the tax time process.