I have been very busy scanning bills and shredding papers - two separate, but slightly related projects. This has taken me only about 4 days - and by days I mean 4 sessions of a few hours each.
First the scanning - Last month I decided and posted about - 4-13-17 POST
- deciding to scan in bills as I pay them. Understand if I pay a charge card bill, I am only scanning in the statement, not every slip - even I am not that crazy - this is to make it easier if I need to view or need a copy of what I paid. Per the earlier post this is the result of needing a bill from last year and not being able to find it. I was lucky enough to have a scan of the bill and was able to use that for reference.
So I have since been scanning each bill as I pay it. For our personal checking account I am scanning them into my data drive. I set up a folder for the year with a subfolder for each month to make it all easier to find. For our business checking account I am just using a folder for the year as we write very few checks. I will go back when I have a chance shortly and scan in the bills from earlier in the year.
Once a year I empty out the oldest storage box of records - I have 9 boxes so it is the one from 9 years before - and refill it with the previous year. I cannot do this in earlier in the year as I want to include in the new year’s storage, the papers needed for income tax and our bank statements through the end of the prior year and I like to have the last statement we have at hand - some of our statements come in quarterly, so this can not be done before mid-April at the earliest and generally later than that. This year since I did not put our business return on extension I was ready to do this switch over now. I have been getting rid of 2007 records to make room for storage of 2016 records.
I was already to get rid of the 2007 records when the thought hit me - why not scan in the 2016 bills so I have them for reference before I store them away.
Second, the shredding - Before I get rid of the old records (in this case 2007) I shred them. I shred and shred and shred. I actually ended up with almost 39 gallons (3 kitchen bags) of shredded papers. Some papers I toss in the shredder without looking at, others I check first.
Which ones do I check? I look through the checking statements - personal and business - and keep any checks which paid income taxes or sales taxes (for the business). I keep these (or a scan of them - front and back) forever. I set them aside in my “to file” holder on my desk to file at the end of the week when I do filing. They will go in my tax files - personal or business - depending on what they are for. I also go quickly through our credit card statements. I look for any large amounts (over $100) and check what they are for. If they are for hotels, food, etc. I just skip them. If they are for a specific thing I look at them. This is especially true for expenditures for the house which may add to its cost (technically its “basis”) when we or our heirs one day sell the house and will lessen the profit on that sale. Anything else large I look at and sometimes discuss with my husband if we need to keep it for any reason. Almost always anything other than house related bills go into the shredder. For 2007 there were few bills that I looked at and those were large food bills or hotel bills. One bill was for a clothing item for me to wear when reenacting. I pulled that bill and made a note of the name of the company as reenacting friends have asked where I bought it and I did not remember. Now I have the name to give them.
Now here is where I took a big chance on being able to do two things at once. I had the large plastic box of 2007 records and a cardboard box (that originally held large manila envelopes) which was holding our 2016 bills. Two tasks to do - which to do?
Both of course. I would put a bill from 2016 in the scanner and hit the scan buttons. I would then take a handful of papers from the 2007 box and shred them - setting aside the bank and credit card statements. I did this for 3 days - working in checking the statements and shredding them also. I managed to not shred any of the 2016 records and not scan any of the 2007 records.
As of tonight I have finished shredding all of 2016 and the 3 white kitchen size bags of same have been put into a large black garbage bag - so that one cannot see what is in the bags through the white plastic - and the large black garbage bag is out at the curb for pickup tomorrow morning by the Town sanitation department (the garbagemen).
I have also finished scanning of our personal bills from 2016. I have maybe 30 bills for our business which I will scan tomorrow. The box from 2007 has been refilled with bank statements from 2016 and the personal bills from same - the business bills will be added. The information used to do our and the business’s income taxes are also in the box (but not the copies of the returns - they are in my accounting file drawer for my accounting practice - although they are also scanned into the computer as I also do with clients’s returns.
Right now my office is a mess. I end up emptying the shredded papers into our garbage pail in the office as the shredder fills. While I have a fairly heavy duty shredder, it can fill our 13 gallon garbage pail at least 3 times. Pouring this into the larger pail invariably ends up with shreds of paper all over - they have a good deal of static electricity and stick to things. I have promised husband now that I am finished I will vacuum the office tomorrow to clean it up - okay, they followed me out of the office door (it is a spare upstairs bedroom) into the hall and partially down the stairs and that will also need to be vacuumed.
After I scan the 2016 business records into the computer I will add them to the box. I have already gone through our personal and our business file drawers and pulled any records which are not needed at hand for last year and put them in the box. Before putting the box back into the closet I will take a folder in our file drawer marked “last year to file” and add some papers to the 2015 box. These are papers which for whatever reason were not stored or were not able to be stored away when I did this last year for 2015 (which replaced 2006 in a box). I know that something will always turn up which is why I have this file.
I also have a file called “this year”. It is the place I throw anything I want/need to keep and don’t know where to file - it is gone through when I do this switch over and the papers will either go into the 2016 box, be tossed or in some cases left in the folder. To give an example - we receive in the mail a card each from our election board each year with voting information for the year - where to vote, what votes there are and when they will be. I keep this card so when we go to vote we can figure out which of the, constantly changing in location, tables is the one for us to vote at. I keep it until the next year’s cards arrive. Last year we did not receive the cards when they were mailed for the primary (I telephoned and was told we should have received them and confirmed where we should go to vote) and we brought the one from the year before to help us figure out where to go in the room. (Mysteriously they did arrive, several months late, before the actual election.) Normally when we get the new cards I shred the old ones and throw them out - but they “reside” in this folder.
In past years in going through the records to be shed from the older year, I have found interesting items such as paper items from our 25th anniversary stay at a Colonial Williamsburg restored tavern - I did not keep any longer, but it was nice to remember the stay. (Yes, one can stay in restored houses and taverns on streets within the restoration as part of their hotels. It is rather pricey by our standards and this was the only time we did so - and even then, we stayed there for 3 nights during a reenacting weekend and stayed at a regular - much cheaper - hotel the rest of the stay.) This time I could tell by various papers and checks I found that this was the year husband quit his job (which is when I thought he did). Hard to believe that 10 years has passed.
Oh - you may wonder why 9 years in boxes - why not an even 10? Two reasons. The boxes were sold in packages of 3 boxes. Also I can fit 9 boxes on top of the closet in our office, but not 10. I figure that with the current year I have 10 years of records for taxes - and with scanning - even more.
THOUGHT FOR THE WEEK -
How do your store your old records? Presuming that you are in the U.S. you need to keep at a bare minimum 3 years of records for income taxes. Ten are generally recommended. IRS and states can generally audit you or say that there is an error for 3 years after you file a tax return, 7 years if after the due date if you do not file a return. (General rule - states can always have their own laws.)
I know that in the past our state has had “amnesty” periods when one can file a tax return which one has not filed and/or pay any taxes owed and apply to have any penalties on that amount waived so that one only pays the tax and interest (and sometimes one does not even have to pay the interest). I know that clients, as well as us, have received notices during these amnesty periods for return which were filed and paid. When I contacted the state about it being too long after the returns were filed and paid as no notices were receive before and it was past the 3 or even the 7 years I always got the same response - “We mailed you notices and we do not know why you did not get them so the action was started within the required 3 years.”
As a result of this I tell clients to keep all payments for taxes forever. This is the checks which pay estimated taxes or the final payment, W2 forms with withholding. 1099 forms of any type which have taxes withheld (these are the forms you receive in January for interest, dividends, stocks etc sold, amounts you received from pensions IRAs or 401k plans etc), Forms K1 from partnerships, small business corporations or LLCs, etc. You can scan in them into your computer to keep them or keep them as paper copies or both. I keep copies of same of ours.
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