It’s the time of year when you’re going through a drawer, folder, or random piles of paper trying to locate exactly where you put a document you need for filing your return. How much time do you spend just trying to re-locate documents? You likely get pieces of information in all through the year that you’ll need for filing, but you don’t really need them until about now (February) when you start getting them together for your accountant, so it’s a good idea to have a system to keep them secure and organized. The IRS has some recommendations on best practices for doing just that. The best part about their recommendations is that if you use TaxCaddy, it’s easy to follow their advice.
IRS Recommendation: Throughout the year, taxpayers should add tax records to their files as they receive them. Having records readily at hand makes preparing a tax return easier.
TaxCaddy: All you need to do is download the app to your smartphone. Each time a new piece of paperwork comes in, just open the app and take a picture of the document. TaxCaddy saves it as a PDF and that’s it! You can shred the paper instead of storing it away in a drawer somewhere. It works the same way your banking app does when you take a picture of a check.
IRS Recommendation: Taxpayers should develop a system to keep all their important information together. They can use a software program for electronic recordkeeping.
TaxCaddy: TaxCaddy IS an electronic recordkeeping system. And it’s free for Avizo clients to use!
IRS Recommendation: In general, taxpayers should keep their documents for three years from the date they file the return. These documents include anything supporting income (W-2s, 1099s, K-1s, receipts, investments), deductions (charitable donations, mileage, medical payments), and all records relating to property disposed of, sold, and/or purchased.
TaxCaddy: If you’re not using TaxCaddy, that’s a lot of paper that could be easily lost or accidentally destroyed.
Did you really just say accidentally destroyed? I sure did. And the IRS addresses this as well.
IRS Recommendation: Taxpayers should prepare for natural disasters such as floods, wildfires, and hurricanes by updating their emergency plans and by keeping sensitive documents in a safe place. From tax documents to bank statements, and tax returns to insurance policies, make sure these items are stored digitally and not only on paper.
TaxCaddy: Although TaxCaddy is meant for your tax documents, you can add in any information you want (just remember your CPA can see it). Your account is yours forever – it does not belong to Avizo Group. It is also incredibly secure. So, in addition to protection from natural disaster, TaxCaddy’s three layers of encryption protects your documents from cyber criminals who use tax information to file false returns.
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These are only a few of the benefits of using TaxCaddy. For the last two years, Avizo clients have been using it and those who have adopted the system agree it is easier and less stressful than storing, finding, and bringing in paper documents. If you’re a client and you’re not signed up just email me if you have any questions!