Tax Document Organizer
by Sasha
______________________________________________________________________________________________________________________________________________________________________________________________________For most households and small business owners, keeping track of expenses and receipts is one of the more time consuming but important paperwork tasks in their household or business. Even with a well designed tax document organizer finding the right records at the end of the year can be a challenge if it isn’t maintained during the year.
By using a good tax document organizer and some of these tips on creating a document filing method that works for you and your business you should be able to spend less time gathering documents during tax time, but still make the most of your allowed deductions. You may even be able to save money on your tax preparation services if your tax documents are well organized and if your paper or electronic files are easy to find and understand. Good document organizers can pay for themselves in a number of ways.
A Tax Document Organizer Needs A System Be Be Effective
The best way to handle tax documents is to have a method for collecting documents, and then a method for filing them. During the collection phase, it can be handy to have a small document organizer that is portable. Keep one in your car for stashing receipts and other paperwork. When you have to visit clients, be sure to use a travel document organizer to collect receipts and other travel paperwork.
Tax Document Organizer
Once a month (or more often), take all of the tax paperwork you’ve gathered and organize it in a tax document holder or scan and organize the paperwork with document organizer software. Some accounting programs, like Quickbooks allow you to attach scanned documents to invoices and other transactions making it particularly easy at tax time. There are also digital or electronic document management programs that will keep track of keywords or tags so that documents are quick and easy to find whenever you need them. If you get digital receipts via email create a label or folder for those receipts so they are all in one place and easy to find.
If you file your documents electronically you can physically file the originals and still have a quick reference electronically that is easy to access. Keep in mind electronic files can become corrupted so it is good to keep the originals too. If you use the electronic method for long-term storage you’ll want to have a robust backup system in place in case of hard drive failure or data corruption. Always store one copy off of the premises in case of fire; if you use cloud or remote servers for digital document storage your files will automatically be stored off site so your backups won’t be vulnerable to fires or other possible home disasters. You also want to encrypt the data for additional security.
Online Document Storage
Another option is to use online document storage instead of storing the files on a single computer or network. There are a number of advantages to storing your documents online, but you also need to take some extra precautions for security when storing sensitive information.
Using cloud storage for your documents allows you to access them from multiple locations and on multiple devices. It also allows you to access these files even if your computer is destroyed in a natural disaster or fire. Services like Dropbox or SugarSync make storing and accessing documents from multiple locations easy. But if you are storing any documents with sensitive information like account numbers or your social security number you will need to encrypt those files with something like TrueCrypt to make sure they are secure and inaccessible by others.
For Tax Accountants
Accountants and CPA’s have to process mountains of paperwork each year. If you own your own accounting firm, then having a robust small business document management system is a great way to improve efficiency and impress your clients. Some systems, like the Lacerte system from Intuit allows you to store, print and fax right from your PC. Storing your client’s records is also a great service to offer – and most systems offer a way to do so securely. Paper files are always at increased risk to theft. With electronic encryption there is a lower chance for theft and compromised personal financial data.
The Bottom Line
If you use a tax document organizer to keep track of all your tax documents and receipts throughout the year, you’ll be able to easily take advantage of all your allowed deductions on your business and personal returns. Even if you opt to keep your documents in a paper filing system, having a portable way of collecting documents in the interim can ensure that you don’t lose any receipts. Create a document management system and train your employees; at the end of the year you should see the difference in your bottom line.
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