The Beatles wrote all about it in 1966 and it's still true today. January 31st has come and gone and in case you didn't know, that's the deadline for employers to have sent out W-2 forms to employees. It's also the signal for tax accountants all over the country to begin hunkering down, stocking up on Power Bars, and getting ready for their busiest time of year. Yes, I mean TAX TIME! Getting a root canal...
going out for a night on the town with Michael Richards and preparing taxes are high on everyone's list of "Things I'd Love To Do This Month!" Woohoo!
A long-time subscriber, Grace Simms of Birmingham Alabama writes, "I would like to hear about what to do with old bills and tax materials. How
long to keep them and how to store them."
As
for retention of tax materials and paper work, I always refer my clients to the IRS personal
document retention guidelines (Publication 552) on the IRS web site. If you're a business, check out Publication 583 for the same guidelines as they apply to you. To store your tax returns and supporting documents, because they're personal information, I'd recommend keeping them in locking file cabinets. However, I do know plenty of people who just
use a plastic bin stored on a closet shelf somewhere and just keep adding each year's return to it until it's full.
If you're an employee and it's just your personal returns we're talking about, it's really up to you how secure you feel you need that information to be. If you're a business person, however, or you're in charge of storing this information for a company, definitely keep it locked up securely. I'm a fan of enclosing each year's information in its own container, folio or large envelope inside a file cabinet, as opposed to storing the information in file folders. I find storing them all in a single container makes them much easier to handle, keeps the information separate from year to year and makes transporting individual returns simpler.
To find more information on finances, document retention, and take a fun money quiz, visit Ric Edelman's web site. In addition, Ilyce Glink has tons of free articles and great information relating to personal finance and real estate investing on her site. And to find any current IRS tax form or publication, just click here.
Happy Tax Preparing!
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