Top 5 Tips To Help You Deal With Paper

organize office and deskOne of the biggest organizing challenges for most people, at least those who hire us, is with paperwork. After doing this kind of work for 10 years, it seems that the common denominator is that most people don’t know what to do with paper. They don’t know where or how to file it or how long to keep it. As a result, people keep paperwork much longer than they need to. Then, when they run out of space, the overflow winds up in piles, in bags or boxes. 

 

The IRS has a paper retention guideline that you can use if you’re not sure whether you need a document or not. Here’s the link to their website: https://www.irs.gov/businesses/small-businesses-self-employed/how-long-should-i-keep-records

 

The truth is, there’s only so many options when it comes to handling paper, “the right way”.  A filing system doesn’t need to be complicated.  It just needs to work for you. There is no right or wrong way. 

So, here’s a few tips to keep your paperwork under control and, hopefully organized. Disclaimer: These are a few examples-not a comprehensive list.

 

  1. TOSS:
  • Anything you don’t want or need
    • Solicitations, flyers, catalogues

 

  1. SHRED:
  • Documents that have your personal information (ie, an account number, birthdate, social security number, driver’s license number) 
    • Note: Your address does not count as that is available to the public
  • All credit card offers
  • Applications
  • Expired credit cards
  • Old checks from closed accounts

 

  1. ARCHIVE:
  • Anything that you need but don’t need access to currently
    • Old tax returns
    • Legal files that are closed/settled (ie, Divorce records)
    • Documents that pertain to the purchase or sale of property

Please refer to the link above to determine how long these documents need to be kept

 

  1. SCAN:
  • If you’re attempting to go paperless make sure you have a system so that you can find these documents when you need them
    • A good rule of thumb is to have your scanned documents filed on your computer the same way they are filed (labeled) in your physical file

 

     5.  SET UP ACTION FILES:

    • To Do: Papers that you need to make a call about. It could be a bill you’re disputing
    • To Pay: Bills that need to be paid
    • To Read: Articles of interest
    • Events: Tickets or invites
    • Follow up: Items that you are waiting for. For example, you already made a call and spoke to someone about an issue with a bill and now you’re waiting for a response.

 If you need some help, please give us a call.  We will help you implement a system tailored to your specific needs.

Tax Time Tips

  1. Gather all of your important papers in one place.
    • I use a bankers box for each year.  That way, when I can get rid of the papers for that year, which according to my CPA is 4 years, I can shred everything without going through it again.
    • Make sure to label the box (ie, 2019 Tax Documents) on all 4 sides so it’s easily identifiable
  1. Take out anything that is tax deductible to prepare your taxes. This information will be what you or your CPA uses to prepare your returns.  This varies depending on whether your filing as an individual or on behalf of a business.  Here’s a list of some items you’ll need:

Personal Information

Tax Identification Numbers are mandatory items on your tax prep checklist. All taxpayers will need the following information.

  •  Your social security number or tax ID number
  •  Your spouse’s full name and social security number or tax ID number

Dependent(s) Information

Parents and caregivers should gather this information as they review what they need to file their taxes.

  •  Dates of birth and social security numbers or tax ID numbers
  •  Childcare records (including the provider’s tax ID number) if applicable
  •  Income of other adults in your home
  •  Form 8332 showing that the child’s custodial parent is releasing their right to claim a child to you, the noncustodial parent (if applicable)

Sources of Income

Many of these forms won’t apply every year. For example, you will only receive the investment forms you may need to file your taxes if you had distributions or other activity.

  • Employed
    •  Forms W-2
  • Unemployed
    •  Unemployment, state tax refund (1099-G)
  • Self-Employed
    •  Forms 1099, Schedules K-1, income records to verify amounts not reported on 1099s
    •  Records of all expenses — check registers or credit card statements, and receipts
    •  Business-use asset information (cost, date placed in service, etc.) for depreciation
    •  Office in home information, if applicable
    •  Record of estimated tax payments made (Form 1040–ES)
  • Rental Income
    •  Records of income and expenses
    •  Rental asset information (cost, date placed in service, etc.) for depreciation
    •  Record of estimated tax payments made (Form 1040–ES)
  • Retirement Income
    •  Pension/IRA/annuity income (1099-R)
    •  Traditional IRA basis (i.e., amounts you contributed to the IRA that were already taxed)
    •  Social security/RRB income (1099-SSA, RRB-1099)
  • Savings & Investments or Dividends
    •  Interest, dividend income (1099-INT, 1099-OID, 1099-DIV)
    •  Income from sales of stock or other property (1099-B, 1099-S)
    •  Dates of acquisition and records of your cost or other basis in property you sold (if basis is not reported on 1099-B)
    •  Health Savings Account and long-term care reimbursements (1099-SA or 1099-LTC)
    •  Expenses related to your investments
    •  Record of estimated tax payments made (Form 1040–ES)
    •  Transactions involving cryptocurrency (Virtual currency)
  • Other Income & Losses
    •  Gambling income (W-2G or records showing income, as well as expense records)
    •  Jury duty records
    •  Hobby income and expenses
    •  Prizes and awards
    •  Trusts
    •  Royalty Income 1099–Misc.
    •  Any other 1099s received
    •  Record of alimony paid/received with ex-spouse’s name and SSN

Types of Deductions

The types of deductions you can take depend a lot on your life situation. It’s likely you won’t need all of the records listed below for your tax documents checklist.

  • Home Ownership
    •  Forms 1098 or other mortgage interest statements
    •  Real estate and personal property tax records
    •  Receipts for energy-saving home improvements (e.g., solar panels, solar water heater)
    •  All other 1098 series forms
  • Charitable Donations
    •  Cash amounts donated to houses of worship, schools, other charitable organizations
    •  Records of non-cash charitable donations
    •  Amounts of miles driven for charitable or medical purposes
  • Medical Expenses
    •  Amounts paid for healthcare insurance and to doctors, dentists, hospitals
  • Health Insurance
    •  Form 1095-A if you enrolled in an insurance plan through the Marketplace (Exchange)
  • Childcare Expenses
    •  Fees paid to a licensed day care center or family day care for care of an infant or preschooler
    •  Wages paid to a baby-sitter
      Don’t include expenses paid through a flexible spending account at work
  • Educational Expenses
    •  Forms 1098-T from educational institutions
    •  Receipts that itemize qualified educational expenses
    •  Records of any scholarships or fellowships you received
    •  Form 1098-E if you paid student loan interest
  • K-12 Educator Expenses
    •  Receipts for classroom expenses (for educators in grades K-12)
  • State & Local Taxes
    •  Amount of state/local income tax paid (other than wage withholding), or amount of state and local sales tax paid
    •  Invoice showing amount of vehicle sales tax paid
  • Retirement & Other Savings
    •  Form 5498-SA showing HSA contributions
    •  Form 5498 showing IRA contributions
    •  All other 5498 series forms (5498-QA, 5498-ESA)
  • Federally Declared Disaster
    •  City/county you lived/worked/had property in
    •  Records to support property losses (appraisal, clean up costs, etc.)
    •  Records of rebuilding/repair costs
    •  Insurance reimbursements/claims to be paid
    •  FEMA assistance information
    •  Check FEMA site to see if my county has been declared a federal disaster area
  1. Keep your tax return together with the backup documentation for 7 years. That means 7 years from the date of filing.   Keep in mind that we file the year after so if you file late, in October, then keep your records for 7 years from that date (ie., if you file October 2020 for the year 2019, keep your records until October 2027.

**NOTE:  NEVER throw out the actual “tax returns” unless you are already collecting Social Security.   Even though your CPA may advise you to keep your records for 4 or 7 years, PLEASE keep your tax returns. Why?  Because when you are ready to collect Social Security, the only proof you’ll have is your tax returns.  If there is a discrepancy in the amount that you’ll be receiving, the burden of proof is yours.  The Social Security Administration, The IRS and The FTB are NOT responsible to keep or have your information.  You are!   Therefore, IMO, better safe than sorry

It’s Still Not Too Late! Are You Prepared For An Earthquake?

Natural disasters like earthquakes, hurricanes, tornadoes, floods and/or fires, can have disastrous and far reaching effects on our lives. Especially if we are not prepared!

Watching the news and seeing images of people who lost everything, their houses, cars, clothing, family heirlooms and photographs, in the aftermath of a natural disaster, has always made me think about how they were going to put their lives back together. While we can’t prevent or stop these events from happening, we can be prepared so that we can mitigate the damages.  

 Since we (at least most of the people getting this newsletter) live in California, earthquake territory, I put together a list of five important tips for how to be or how to get prepared for an earthquake. Hopefully this will provide information and motivate you to do something, anything, towards getting you and your loved ones ready, just in case…

1.  Be Informed:

 

2.  Be Proactive: 

  • Make sure to have an earthquake kit. 
  • Keep one in your car just in case you’re not home when an earthquake hits. 
  • Make sure the supplies are kept up to date.  
  • Medical supplies do expire and old food/water isn’t going to make things any easier when you need them for survival.
  • Prepare an Emergency Kit that includes water, flashlights, batteries, and non-perishable food. For a full list of recommended supplies Click Here.

 

3.  Take action:

  • Put together a communications plan with other family members or friends NOW so you’ll have it when you need it. (notice I said when!) 
  • Figure out where to meet if you are not together.
  • Agree on who to reach out to in another area to let others know you’re okay.

 

4.  Be Smart:

  • Make sure that you have all of your important documents together in one easily accessible place so that you can grab it and go in an emergency:
  • This will help you be prepared so that you can recover your losses quickly: (ie, insurance policies, photos of valuables, emergency contact list). 

 

5.  Stay Safe:

  • Make sure you know where the gas shut off valve is
  • Make sure you know how to turn of the main water supply
  • Don’t light candles (you’d be surprised and how many people don’t know that!)

If you want some detailed information about which documents to put together and how, sign up for my newsletters (if you haven’t already) and get a FREE Emergency File Checklist. (Go to www.organizingconceptsanddesigns.com)

Tax Preparation and Filing Systems. Good Times!

Seems like every article I’ve received for the last few months has been about tax preparation.  So as not to inundate everyone on my email list with yet another article about tax preparation, I chose to write about other things the past few months. However, now that “tax time” is over (for most of us), I thought it would be a good time to put this information out there. 

First of all, I don’t think I’ve ever met anyone who wouldn’t rather be doing anything else besides getting their taxes ready or “doing” their taxes.  I know, and I’m sure you know, a lot of people that have to scramble or spend many hours to pull their paperwork together to file their taxes year after year. So many people just can’t seem to get it together timely and have to file extensions even though we all know that every year on April 15th we have to file our taxes. 

Of course, there are extenuating circumstances and some do have to wait and file in October, but, for the rest, in my opinion, filing an extension just prolongs the agony of having to get this paperwork done.  

Think about this…What if it only took an hour every year to pull your tax documents together? Don’t you think that most people wouldn’t dread it as much? Of course nobody wants to give the government their hard-earned money BUT, I’m thinking it wouldn’t be such a dreadful task if it only took an hour to pull it together.  Truth be told, it should not take more than an hour to pull your tax documents together.   

Here are some suggestions as to how to make tax preparation and other paper challenges less daunting:

A.  If you don’t have a filing system, start one that is easy to use and maintain:

  • Think about what kind of system would work for you:
    • Alphabetical, Numerical, etc.

B.  Get all of your supplies together:

  • Files: make sure you have the right size files for your cabinet or container.
    • Decide if you will use interior files, hanging files, color coded files.
  • Labels: Use a label-maker or labels that you can print from your computer
    • Make sure to name the files correctly so that you can find what you’re looking for.

C.  If you already have a filing system but the papers are busting out of the filing cabinets, purge to make room for the current files:

  • Talk to your CPA to ask how long you need to keep your documents before tossing or shredding anything.

Putting a filing system into place isn’t that difficult. Moreover, once it’s done it’s done!  All you have to do is use it and maintain it.  If done right, it’s just that simple.  Then, whatever you need is there when you need it. No more wasted time looking for papers.   

If you don’t have the where-with-all to do this, CALL me.  I can and want to help. I started Organizing Concepts and Designs 9 years ago after spending 30 years in the Legal Industry as a Paralegal and Legal Assistant. I am familiar with the IRS Retention Guidelines and am well aware of what documents to keep, what documents can be tossed, which ones should be shredded and what needs to be archived (and for how long).  We can implement a filing system tailored to your needs.

Bottom line is…keeping your paperwork organized will save you a substantial amount of time and money.

Organizing & Advocating for Your Health

In the past month, three of my closest family members have had to undergo surgical procedures.   Thankfully, everyone is doing well and on the road to recovery.   

The events of the past month really made me to stop to think about how much easier this past month was because we were organized.    I don’t like to throw around the “should” word but when your health is involved, you really SHOULD be organized. The following is a list of things you “should” have in place prior to undergoing a medical/surgical procedure:

1.  Make sure that you have an updated and legal Health Care Directive.  Give a copy of your Health Care Directive to your primary care physician as well as the physician performing the procedure.   

2.  If you don’t already have a Health Care Directive, you can download one from the internet.  Make sure that the person you designate to make decisions for you in case you are not able, knows and agrees to taking on that responsibility.   The Healthcare Directive must be signed and dated and, in some cases, notarized.   

3.  Make sure that you bring all necessary paperwork with you on the day of the procedure ( ie., insurance card, identification, checkbook and/or credit card).

4.  Know your medical history and provide this information to your primary care physician and the physician performing the procedure.

5.  Make a plan, in advance, to have someone drive you to the appointment and pick you up.   If worst comes to worst you can always call a cab or Uber but don’t make the mistake of driving yourself.

6.  Ask your physician’s office, before the procedure, to call in your prescriptions to your pharmacy.  Pick them up before the procedure.  The less you have to do after a procedure, the better.

7.  Go to the market before the procedure and get whatever you might need for at least a couple of days.   Again, the less you have to do after a procedure, the better.  You may not be able to drive or do much walking afterward and, even if you can, you may not want to. 

8.  Ask your doctor before the procedure to give you the After Care Instructions.  It’s best to review them prior to the procedure when you are more able to comprehend them.   

9.  Don’t be afraid to ask questions both before and after a medical procedure.   Remember to write down any questions and/or concerns so that you don’t forget them when you’re with the doctor.  It is important to be your own advocate.   

10.  Dress comfortably on the day of the procedure!  For example, don’t wear restrictive clothing or shoes that need to be tied.  Leave your jewelry and other items that you don’t want to lose at home.

Part II – Creating an Emergency File

More tips for Organizing Important Information

As you may recall from last month’s newsletter, I provided a list of some of the important documents that you “should” have in one, easily accessible but safe place. While there are many more documents than the ones I mentioned, this is a good start.

I suggest putting these documents in a three-ring binder with dividers for each section. You can also use an expanding file. Use whatever is easiest for you. I’m just thrilled if you get the process going (and your family will be too).

Make sure that whatever you wind up using is accessible and can easily be carried out of the house if and when necessary. Be very thoughtful about where you put this file. You do not want it to end up in the wrong hands. Store it in a waterproof safe that is bolted to the floor or hide a copy under a false name in a filing cabinet or on a shelf. Whichever you choose, make sure someone else knows where it is.
If you decide to keep this information on your computer, don’t forget to:

1) Encrypt & password-protect any folder or list you have on your hard drive
2) Remember the password & write it down someplace that is not accessible to stranger
3) Give it to a loved one who is not your spouse or significant other
4) Consider downloading the information and documentation from your computer to a flash drive & keep it somewhere safe;
5) You might also consider storing your important documents on a cloud server

Here’s a breakdown of what to include:

Financial Institutions & Insurance:
• Name, address, phone number & email of each company & your advisor/broker
• Account number(s)
• Location of Safety Deposit Box & key (you may want to include a description of the contents as well)
• Login Information (Password, Username, ID Number)
• Security questions or other instructions for accessing account(s) online
• All pertinent information of beneficiaries
• Name of anyone that has signatory power on the account(s)

Property:
• If you own one or more properties, a list should include the following for each property:
o The address
o Name, address, phone number & email of any co-owners
o Name, address, phone number & email of Mortgage company
o Type of Ownership (Include timeshares, rental units, etc.)
o If property is rented or leased include the name, address & phone number of the renter/lessee
o Where the Deeds can be found

Utilities & Other Service Providers:
• Name of company & type of service
• Account numbers
• Login information if you have an account on-line
• How & when bills are paid (e.g., auto withdrawal, mail, etc.)

Memberships/Subscriptions:
• Passwords, User ID, Account Numbers, etc. for:
o Social media accounts (Facebook, Linked-In, Twitter, YouTube)
o Websites (personal & business)
o Email Host
o Domain Host
o Online Shopping Accounts (e.g., Amazon, eBay, etc.)
o Frequent flier accounts

Credit Cards:
• Name of Card
• Names of Cardholders
• Account number
• Security Code
• Expiration Date
• Make a copy of front & back of card

Last Wishes:
• If you haven’t done any pre-planning, this is your chance to let your loved ones know your wishes. Take some time to think about what you want with regard to:
• Funeral, burial, memorial service
• Preferred funeral home
• Specific requests:
• Graveside
• Pallbearers
• Cemetery plot location
• Type of casket or urn
• Obituary information
• Body/organ donor
• Burial clothing
• Preferred music

Medical Information:
• Names, addresses & phone numbers of treating physicians
• Allergies (include allergies to medications)
• Important diagnoses/disorders
• Important medical procedures
• Medical appliances (i.e.: pacemaker)
• Family history
• Medications you are taking
• Name, address & phone number of pharmacy
• Name, address & phone number of emergency contact

Assets/Inventory:
• List of Personal Property that has significant value including, but not limited to:
o Cars (list each one by make & model number if there’s more than one)
o Furs
o Artwork
o Antiques
o Family Heirlooms
o Jewelry
 List of who you want to have these items when you pass on. Make sure to attach a copy of the list to your will & make sure to give the executor of your will a copy as well.
 *Note: Be specific & describe the item if there’s more than one!

Insurance Information:
• Name, address, phone number & email address of broker
• Declarations Page
• Premium Amount & Due date
• Elimination period
• Policy number & Group number
• Policy period

Employment:
• Name, address & telephone number of employer and/or immediate supervisor
• Copy of Employment Contract
• Copy of any Stock Certificates
• Copy of any Retirement Plans, Pension Plans, 401K Plans, etc.
Once again, this is not a comprehensive list but it’s a great start.

If you need help with an organizing project of any kind, give us a call. We’d love to help!