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Tax Records: 2011 Tax Documents

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Tax RecordsDocument organization takes time and energy. Having recently purged our tax boxes, I ended up with two 20-gallon totes full of paperwork to shred. Now, I had let our tax documents pile up, so I still had records from 2007. (I said it had been awhile. :-)) It was so nice to rid our home of all that outdated paperwork.

In choosing what to keep and what to toss, I made my decisions based on what I needed. The Internal Revenue Service (IRS) typically has 3 years to audit a tax return and 10 years to collect taxes. Since our taxes have been paid each year, I keep 3 years worth of records.

These records are all the statements, payments, contribution records, donation receipts, interest notices, tax forms, and other documents needed to file our taxes for that year. Should the IRS choose to audit our tax returns, I will have all the records available to prove the amounts entered for each line item.

In addition to 3 years of records, I also keep every tax return we file with the W-2 forms. My reasoning is to prove our Social Security benefits should the Social Security Administration change the laws or lose our information.

Keeping the hard copies of the records is for my peace of mind. These small packets do not take up much space, and I cannot recreate these documents should I need them in the future.

Now, I house all those records in 20-gallon totes. In our important documents file, I keep the current 3 years of tax returns. The last post was focused on our 2012 tax documents. Today, I will share the records kept for our 2011 tax documents.

2011 Tax Documents

Located in the 11th file opening of File Box 3, the first bundle of paperwork is our 2012 tax documents. The second bundle consists of these 2011 tax documents:

Federal Tax Documents

    • Copy of tax refund check
    • Federal Income Tax Return with Schedules and Worksheet

State Tax Documents

    • Copy of tax refund check
    • State Income Tax Return

Electronic Filing Documents

    • TaxAct Declaration
    • TaxAct Filing Instructions for Federal and State
    • TaxAct Status Report
    • TaxAct Confirmations
    • TaxAct locked in price for 2012 at a discounted price

Each of these sections is either stapled or paper clipped together and then one large paper clip combines all three sections into one bundle. This bundle is the second of three years kept within this file opening of our tax records category.

Keeping the records in two places might cause more confusion than order. If so, then do what is best for you. For me, I sometimes need to know what our gross annual income was for a particular year. By having those records in our important document file within easy reach at my desk, I can quickly locate that information. If I had the records in the totes, then I would need to go to storage to get them.

I share my system as an example of what is working for me. Finding a system that saves you time and energy is the key. Keep on organizing those important documents as we tackle those piles of paperwork. Happy organizing!

Question: Do you keep your tax documents in one location or in multiple locations?

Tax Records: 2012 Tax Documents

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Tax RecordsI have always been very careful with my tax documents. Up until a few years ago, I submitted all documentation by mail and kept our information offline.

When the IRS stopped sending the tax forms, I looked to the Internet to get the needed forms and to electronically file our taxes. Shortly after that move, the state of South Carolina had a security breech.

Now, I am very thankful that I opted to wait for our return and get a paper check. By doing so, the hackers were not privy to our bank account information.

In keeping our tax records together, I file 3 sections of paperwork which comprises our 2012 tax documents.

2012 Tax Documents

With federal, state, and electronic filing paperwork, I keep the following documents within the 11th file opening of File Box 3:

Federal Tax Documents

    • Copy of tax refund check
    • Federal Income Tax Return with Schedules

State Tax Documents

    • Copy of tax refund check
    • State Income Tax Return

Electronic Filing Documents

    • TaxAct Declaration
    • TaxAct Filing Instructions for Federal and State
    • TaxAct Status Report
    • TaxAct Confirmations
    • TaxAct Joint Return vs. Separate Returns Analysis

Each of these sections is either stapled or paper clipped together and then one large paper clip combines all three sections into one bundle. This bundle is housed behind our summary sheet and is the first of three years kept within this file opening of our tax records category.

In using time wisely, I keep the main tax documents within this file opening while the specific documents are housed with our last 3 years of documents in a large tote. As I file our taxes each year, I like to compare our returns to see the changes to our deductions based on the new tax laws.

The next set of documents in this file opening is our 2011 Tax documents which I will share next week. Keep on working on those important documents as you will not regret your investment of time. Happy organizing!

Question: Do you elect to have your refund automatically deposited into your bank account? 

Tax Records: Summary Sheet

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Tax RecordsRealizing that taxes are not typically on your brain (or mine) at the end of summer, I am focusing on creating a home for those important documents with our last category in our important documents. This way when tax season comes, you are one step ahead.

I remember when I started organizing our documents, Paul and I had years of records. As I read and organized, I found a system that worked for me.

Keeping with my preferred method, I included a summary sheet within this category.

Summary Sheet

Though most of my summary sheets include sensitive information, this summary sheet is more of a checklist. I keep information that someone else may need to know regarding our tax documents. A sample of the information is as follows:

  • For simple tax returns, keep documentation for 3 years.
  • For more complicated returns (business, capital gains or losses, Roth IRA conversions, etc.), keep documentation for 6 years.
  • Keep satisfied loans for at least 7 years.
  • File receipts for charities, investments, business expenses, real estate and mortgage interest and points with corresponding tax return documentation.

My summary sheet also includes the location of our tax documents. In keeping only the tax forms within File Box 3, I keep the 3+-year records in totes. With instructions as to where to find those documents, the executor of our estate can find those documents should he need access to them.

In using time wisely, my summary sheet saves me time in looking up information when I question whether or not to keep records. Though this sheet is optional, I find it very useful.

As you evaluate which resources work for you, experiment with similar methods that you use in other organizational projects. No need to reinvent the wheel when you find a system that works for you. Happy organizing!

Question: How long do you keep your tax records?

Tax Records Documents Overview

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Tax RecordsPrepare yourself . . . this is the last category of our important documents file.

Yes! We have reached the last one after a few years of organizing our important documents broken down into File Box 1, File Box 2, and File Box 3.

Within File Box 3, we have created categories for Social Security documents, Retirement Plan documents, Investment documents, and Estate Planning documents. The last category is our Tax Records documents.

Though I keep our 3-year records in large totes, I have a section within our important documents dedicated to our tax records.

The records held within our important document file reside within one file opening and include the following:

Tax Records Documents

  • Tax Document Summary Sheet
  • Tax Records from 2012
  • Tax Records from 2011
  • Tax Records from 2010

As I share the contents of our Tax Records documents, these are choices that Paul and I have made. I share them as an example of how to organize. Your situation maybe more or less complicated, so adjust these suggestions to meet your needs.

The goal is to organize your important documents. My documents are complete although routine maintenance is ongoing. In using time wisely to get these documents organized, you will save money from paying for duplicate documents, energy from searching through stacks of papers, and time by going directly to the source. Happy organizing!

Question: Do you keep all your tax records in one location, or do you keep the pertinent information with your important documents?

Estate Planning: Other Estate Planning Packages

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Estate PlanningToday, we finish the fourth category within File Box 3. Woo hoo! With only one more category, we are coming to the end. You have patiently hung in there through this process of looking at each document type to evaluate if you need each of these documents.

Though I enjoy the document organization category, I realize that it is not the highlight of the week for most of you. For me, the more organized I am at home with the paperwork, the more freedom I tend to be with activities because I know all is covered at home.

When home life is in disarray, then I tend to stay home to work through the cleaning, laundry, paperwork, coupons, etc. As I emerge from piles and get on top of our home life, then we go to the park, entertain, and hang out with friends.

Knowing how I operate helps me know where to start and how to progress to a calm, organized home. It takes time, but I find investing in our home using time wisely.

In investing in organizing our important documents, I finished last week with most of our estate planning documents filed. The last items are other estate planning packages, housed with our research items in file opening 9 of our file box 3.

Other Estate Planning Packages

As an executor, beneficiary, and/or trustee of others’ estate planning packages, I needed a place to hold those documents. As they are all estate planning documents, I wanted to keep them separate from our information.

My solution was to place each package into a separate 9”x13” envelope with the family name written on the outside. I then keep these envelopes in this file. If we get notification that one of these friends or family members needs the information, then I can quickly locate all the documents at once.

That’s it! In getting the last items of our estate planning documents filed, this category is currently complete. Though I may still add more research information and need to adjust our checklist information, the bulk of this category is done.

If you are following along, then celebrate this accomplishment. You are doing so well getting all your important documents organized and filed. Keep working, and enjoy having another category complete. Happy organizing!

Question: How is your document organizing coming along?