Since it’s tax season and you have to gather the relevant documents to file your taxes it’s a good time to set up your system for tax information.
1. How long do you want to keep tax-related information? The IRS says to keep records for 3 years (as long as you have been honest in reporting😉).
2. Once you decide on how many years you will keep, every year rotate out the last year and shred the old back up documents making room for the latest year’s information.
1. At the beginning of every year, create a tax document file - use a folder, a bin, a box - it does not matter - just label it with “TAX” and the current year.
2. Put anything that is tax related (or you think may be tax related) into the container throughout the year.
(no need to create separate folders, just throw it all in the one place)
It will be so much easier next year when all your docs are in one place and easy find.
If you do both of the above, you will have a system in place for your tax documents and spent minimal time setting it up.