Paperwork: A Blessing And A Curse

Posted on March 24, 2008 by Melissa 
Filed Under Organizing, Taxes

Paperwork…arghI have been under the pressure of a deadline lately. One of the most important deadlines, in fact: filing my taxes.

Normally I’d have my taxes done by now but this year is different.

In the old house I had a desk and an office area where I kept most of our recent paperwork organized. As we approached the move, I let my paperwork build up and bills ended up in “to be filed” grocery bags.

All that paperwork (in addition to the older stuff) ended up in multiple boxes, which then ended up in multiple rooms of the new house. I’m finding myself pretty disorganized when it comes to paperwork right now and with taxes due, I have to kick it into high gear.

To make matters worse, all the old paperwork (2005 and earlier) that hadn’t been filed properly to begin with got thrown the mix. I’ve been avoiding that mess since before we got married but it appears I can avoid it no longer.

My original plan of attack involved organizing only 2008 and 2007 paperwork then putting the older paperwork in bags separated by year. I figured the only reason I’d have to access the old stuff would be for an audit or to dispute a bill. Why waste my time organizing ancient bills for something as unlikely as an audit? If it happens I’ll just sort through the bags then.

On the other hand, why not just file that old paperwork into general categories (utilities, credit cards) while I’m already sorting it? It’s going to have to pass through my hands to be examined for date anyway; I might as well put it in some sort of order, right?

Good thinking, but that could lead to a slippery slope where I find myself wasting time and resources on paperwork that I’ll never need to look at again.

So, my plan is this:

I will properly file the 2007 and 2008 paperwork in the file cabinet. Those years are the most relevant and I need the 2007s accessible right now for taxes.

I will “lightly” organize the paperwork from 2006 and 2005. I bought accordion-style organizer boxes for the task. The boxes already have general categories labeled on the dividers so it should be easy to lightly organize those years as I sort them. I can also store the paperwork in those boxes for easy access.

Paperwork from 2001-2004 will be placed into bags labeled with the year. I didn’t want to give up on those years but I have to draw the line somewhere or I’ll be at this for weeks. It’s like I’m declaring paperwork bankruptcy for those years. I think the best plan at this point is to make a clean start going forward.

I have also made a promise that, from now on, all new paperwork will be organized into folders in the file cabinet, then stored in file boxes until shredder time.

I know paperwork isn’t fun but its life. Now I’m off to tackle some serious filing.

Do you have a method for organizing old paperwork? How far back to do you keep records?

Image Source: Librarian Avenger

Comments

9 Responses to “Paperwork: A Blessing And A Curse”

  1. Kyle on March 27th, 2008 9:57 am

    It sounds like you have a very solid plan! I can’t really give you any good advice because I have been “lightly” organizing since 1989.

    Best of luck!

  2. Fabulously Broke on March 29th, 2008 10:03 am

    I always just remind myself when I feel too lazy to file or scan any document: “WAIT UNTIL TAX TIME”..

    So I use envelopes for Tax time, to sort into “meals”, “medical expenses”, “transportation passes”, “retirement”, etc.. and I put it in one big folder called: TAX YEAR 2007 *2008 now…

    Then when tax time comes around, I pick out an enevelope I’ve been filling and enter it into my spreadsheet that I created for this purpose, and wait for the final number to pop up at the end.

    Then I enter those #s into the tax software.

    It’s the only way I’ve found I could be organized now.. and it helps save money when you go to the tax man too because if he doesn’t have to sort through receipts, he charges less :)

  3. Mom2fur on March 30th, 2008 5:18 pm

    That sounds like an excellent plan to tackle a huge task!
    I have a 2-drawer file cabinet with hanging files. I keep tax papers in purple files, which mamkes them easy to find. The files I keep in the cabinet only go back two years, with older files stored up in the attic. You are right, the likelihood of an audit is pretty low. Although I was audited many, many years ago when I was self-employed. I never want to go through that nightmare again.
    Anyhoo, I have a 2007 file into which I just threw anything that said, “Important Tax Information Enclosed.” That way, I only had to gather it all up and send it to our accountant. You might want to make a similar ‘go-to’ file where you just ‘dump’ anything tax-related for 2008.
    Meantime, good luck with getting your taxes done!

  4. Barb Ryan on April 1st, 2008 6:11 pm

    For my personal affairs, I sort receipts monthly into about 15 household categories. The dollar totals go into a simple budget tracking spreadsheet. (Tried Quicken, but too many constraints.) I put as much on autopay as possible and use a single consolidated credit card account (paid in full monthly, of course.)

    Statements go into a single pile for file sorting during the year. At tax time, I do one big file cleaning to pull out everything that applies to taxes. The rest goes into a 10 ream printer box for that year. The boxes get stored in the attic. While the IRS says the limit is 7 years, my boxes go back further. Why not? There’s room.

    The only thing that doesn’t go into annual boxes are investment statements. There is no limit on how long to keep investment records. People do not realize the when they are old and gray, they will be paying excessive ordinary income taxes or capital gains taxes on investments, if they do no t have the records that show what they paid initially and how much they paid in investment costs along the way. These costs can be substantial.

  5. Lisa on April 3rd, 2008 12:52 am

    Every year I say I’m going to get organized so doing taxes will be easier. I’m doing taxes for seven family members this year, the most I’ve ever done in one year. I’m having a party on April 16th. ;)

  6. How To Invest on April 13th, 2008 3:50 pm

    Every year I always seem to have a problem getting my banks and financial institutions to send me the required forms. This year I just finally finished with my taxes do to fidelity no wanting to send my investment related tax forms.. What I true pain. Someday I hope we go to a flat or fair tax system.

  7. kasandra on April 20th, 2008 11:53 am

    For years I had very organized paperwork. I was obsessive, it made everything easy during tax time. I was always able to find things. I had file cabinets labeled and when the year ended I would get new files started. I gave birth to my 2 year old son and everything changed. I found my 2005-2007 files all over the floor one day. It was so profoundly exhausting to look at that I stuffed everything in two boxes, never labeled them and started putting things in a paper drawer! The whole thing is a disaster. Recently, I began sorting through a box I found with paper in it, and some toys. I threw out all of the unnecessary items, and attempted to file them. My son wanted to help and started pulling all of my files out as I was putting it away. I put everything in a box again at least it’s all stuff I need, just very unsorted. I feel pretty overwhelmed about the whole thing. Today I was looking at my empty file and contemplating fixing all the paper work. It will include relabeling files, alphabetizing, and sorting through three or for boxes and paper drawers. I think the stress of not having my files organized is worse than trying to file them. I just did my taxes, and fortunately it was easy. But if I was going to have to find a specific bill or receipt or important note, it wont happen unless I tackel this problem. I think I’ll start today.

  8. Gary Diamond on April 26th, 2008 10:33 am

    I have recently hired in my business an accountant whom does my business and part of the deal is to do my personal tax. So every month they hound me, a little bit of reminding causes no other problems. Previous problems resolved.

  9. pays to live green(new comment) on September 6th, 2008 12:33 pm

    I recently bought a house and it was tough for my wife and I to get all of our statements at various financial institutes. It’s tough to carry all of the required paperwork you need sometimes, especially with most companies going paperless.

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