Today is the first day of spring! Use the start of a new season as an excuse to organize your financial files. Hopefully you’re in the process of filing your 2014 tax return (or already finished!). But do you know what to do with this sensitive information or how long the IRS expects you to save income tax documentation?
Seven years. That’s how far back the IRS recommends you keep tax-related information. For organization purposes, you could get a file box and store your tax information for the past seven years together. That makes it easy to access and to reference for questions you may encounter preparing future taxes.
But really, when it comes to organizing, the best system is the one that works for you! Even if you don’t want a formal system of organization, commit yourself to labeling a folder or large envelope for “2015 taxes” and store documents there throughout the year. Even this small step will make a huge difference when tax time rolls around next year!
For information you are certain you can dispose of, shredding is the safest option. Tax documents contain a lot of personal information that could be used for identity theft. This is another good reason to store your tax forms separately. That way when it’s time to clean them out, you know you’re dealing with sensitive information and you can be sure to dispose of it safely.
You can either purchase a shredder to use at home (look for a cross-cut model), or several office supply stores like Office Depot, FedEx and UPS offer pay-by-the-pound shredding services.
If you have questions about what you need to keep and what can go, call us anytime at (913) 888-9100.
Richard Adams is a graduate of Benedictine College in Atchison, Kansas, with dual majors in Accounting and Business Administration. He is also a graduate of Wentworth Military Academy in Lexington, Missouri.