Get Your Paperwork in Order!
by Phyllis Searles

Description: Organizing your paperwork to get ready for tax season.

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January 31 when the tax forms, W-2, and 1099s start arriving in the mail is considered the start of the Tax Season. Every family should have a well-organized and easy to use home filing system for all important papers and information. Now is the time to get your paperwork in order, not only for tax time, but also for future use. Keeping your family’s important papers in order helps you manage bill paying and recordkeeping matters quickly and efficiently. Your improved recordkeeping and information in organized files gets you ready for the tax preparer and could result in a larger refund if you itemize deductions. All of this gives you more quality time with your family and less wasted time managing papers.

Here’s how to make sure your files are organized and easy to find information that you need at any time.

A basic list of the tools you’ll need to organize your home filing system:

1. File folders – third-cut or fifth-cut letter size manila folders are generic and work for most people. Today, you can select from a number of brands and colors.

2. Labels – whether neatly handwritten or computer-generated you’ll need to label the file folders to make filing and finding papers simple and easy.

3. Markers and Clear Tape – it’s a good idea to cover your file folder labels with a strip of clear tape. This will give your file folders a longer life in your storage system.

4. Trash Can – don’t forget this handy receptacle. If you’re in doubt, use the trashcan and throw it out! More than 80% of all papers filed are never retrieved. Give serious thought to what you’re keeping. Use a shredder to destroy all papers containing personal information. Identify theft is at an all time high.

5. Table or Desk – a flat clean work surface is necessary to spread out materials and organize them as you go along. A tip many organizers use: when working with old papers turn the stack over and start from the bottom of the pile. These are usually the older papers. In most case these papers have already “expired” and are no longer useful. They can be reviewed and tossed out quickly. Newer papers in the pile may require more thinking or decisions will need to be made about retention.

6. Important Papers – make sure you select papers that you definitely need to keep in your home filing system. Keep in mind that many papers you think you might need to keep, you really do not. You can find copies in other sources. A good rule of thumb is to keep important papers that are current, for one year in your file cabinet. Anything older than one year, can be kept in an archive file. Keep the archive file, but don’t store it in your main filing cabinet. Store archived files away in a safe place where you can access them. All archive files should be labeled with a destruction date, reviewed and destroyed every three to five years, and this depends on your personal and business needs for records.

7. Permanent Files – everyone should keep some records permanently. See the side bar with this article for a list of recommended documents. Your personal or business situation may require additional items be added to this basic list. This collection of records is the basis for your “current” files. If you need to access information quickly in case of emergency, this file system should hold your life’s basic information. Everything else should go into your archive files.

8. File Cabinet or Storage System: decide which type of storage container will best fit your needs. A two-drawer filing cabinet works well for most households. All homes should have a fireproof box for original documents. These containers will offer a few hours of protection in case of a fire. A variety of companies make plastic boxes and containers, which will hold small file collections. Limiting yourself to a certain size cabinet, two-drawer versus four-drawer, will force you to purge your files on a regular basis to fit into the cabinet.

9. A Few Hours of Uninterrupted Time – schedule a time to assemble all of the supplies and materials you will need. You’ll need to spend time reading through papers and sorting them into manageable stacks. Next, you’ll develop a filing system and make a file for each item you’ve decided to keep. One of the best products I use and recommend is the HomeFile System, a 48-page Handbook and 22 file divider cards to help you set up your home filing system. The divider cards help you file quickly, with categories and clear guidelines on what to save, how long to keep it and when you no longer need it. This product has a category for every person and item in your household, giving you a way to find documents when you need them and never be overwhelmed by your record-keeping system again. Contact me if you’d like more information about this useful organizing product. If you create your own filing index system it’s important to think of how you’ll look to find an item when you n! eed it next. You can keep an index of your files to avoid duplication. This will help you always find what you’re looking for. It may be necessary to schedule two or three separate times to work on this project if your papers are overwhelming due to years of neglect.

10. Reward – Finished? Good Job! - Make a point to review your files annually and every year look toward archiving information that you haven’t used in your current year’s files. If you find you are not accessing information that you filed, reassess the need to have a file for that item. Every three to five years the contents of your archive files can be shredded and updated. A good rule is to keep legal and financial information for a minimum of three years and a maximum of seven years. Your tax and legal advisors can provide a more specific reference to meet your individual needs. Personal family information and identification records, you’ll keep forever. Information about automobiles or major appliances, keep only as long as you own the item. Everything else you’ll need to determine on a case-by-case basis. With computers and scanners readily available today you may also consider having some files scanned and archived on diskette or CD-ROM. When you’ve complet! ed your project give yourself an appropriate reward. The best reward you’ll receive is a useable, organized home filing system, which will serve your needs for all your information.

Permanent Files – Everyone should keep the following types of records for each member in the family as applicable:

• Birth and/or death certificates
• Auto Registration and Title Information
• Auto Insurance
• Banking Account Information
• Credit Card Account Information
• Driver’s License Numbers
• Family History and a recent Photo of each family member
• Marriage Certificates and Divorce Decree Documents
• Social Security Cards
• Health, Dental, and Life Insurance Policy Information
• Master Address and Family Contact List
• Medical History for each family member
• Military Records and Discharge Papers
• Federal and state tax records
• Living Wills and Durable or Medical Power of Attorney
• Letter of Final or Burial Instruction
• Wills and Trust Documents

Can’t stand the thought of this project? Sometimes the best use of your time is to make a call and hire professional organizing help. A Professional Organizer (PO) can provide ideas, information, structure, solutions and systems that can increase your productivity, reduce stress, and lead to more control over time, space and finances. An Organizer can also come in and complete this project for you, with your assistance, and finish it, usually within three to five hours.

Phyllis Searles is a professional organizer who works from her home, while running an active household and being a wife, and mom to a 2-year old. For more information about the HomeFile System, please contact her at 907-245-3524 or Phyllis@organizinganchorage.com; or online at http//www.organizinganchorage.com. Reprinted with permission.

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