Tuesday, January 24, 2012

Quick Tip Tuesday - Rotating Tax Files

Since we're entering the tax season, I've decided to do a tax-related organizational tip for this week.

For an easy way to store tax returns, consider setting up rotating tax files within your filing system. You'll need 10 file folders, labeled Tax Year 0, Tax Year 1, Tax Year 2, etc. through Tax Year 9. Simply store each year's tax return in the folder marked with the last digit of that year. For example, your 2011 return will go in Tax Year 1, 2010 goes in Tax Year 0, and 2009 goes in Tax Year 9. This will make it super easy to find any past tax return that you may need.

Guidelines generally say that you should keep tax returns for 7 years, in case you are audited by the IRS. With this rotating system, you're actually keeping them for 10 years, but I don't see any problems with that. When you go to file a new return, you can toss (er, shred & recycle!) the return currently in that folder (getting rid of 2001 to make room for 2011).

Here's a shot of my rotating tax files...sorry about the horrible picture quality - they're stored in our dimly-lit basement!

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