NT Storage

[TAXMAN]

Yikes? I am about out of storage space for paper files from earlier days. How long do you keep this stuff? Any ideas on storage of old files?

[Medlin Software, Dennis]

Whatever your legal (and legal defense) requirements are only.  Not so finite to be destroying every day, but grouped by an annual "destruction day".  Separate cabinets grouped/marked by date to be destructed.  (From the idea that if not required to have cannot be used against you, and no good deed goes unpunished.)

[jklcpa]

1 hour ago, TAXMAN said:

Yikes? I am about out of storage space for paper files from earlier days. How long do you keep this stuff? Any ideas on storage of old files?

The answer depends on if you are regulated by only the IRS as an EA or other preparer, or if you are a CPA with additional requirements by the state board, or if the state of VA also has a provision regarding tax return or workpaper retention.

 

[SaraEA]

Try electronic filing, it's wonderful!  We use UltraTax for tax filings and store the returns, original tax docs, signatures etc in their electronic "file cabinet."  We can also send what we prepare in ATX like 1099s and W2s to there, as well as correspondence, sales tax returns, notes, IRS letters, you name it.  You can achieve the same thing by saving files prepared in the tax program to specific client files you create and scanning signature docs or whatever and saving them to there as well.  It is so easy to sit at your desk and pull up the client files while they are on the phone.  They need copies of their W2s for the last two years?  Right there.  You don't even have to print them, just fax or email right from your desk.  And you don't have to dig out paper files, find what you want, and they put the files back in the right place in the physical file cabinet (we were never good at that part).  The only paper files we keep now are Forms 2848 with original signatures.  I also keep tax docs for estates because they are often reported for a calendar year and since most of my estate tax filings are for fiscal years, it is just easier to have the paperwork where I broke down what belongs to the decedent and what goes to the estate, and which fiscal year gets what.

I highly recommend that you purchase or create some kind of electronic filing system that will work for you.  This summer, hire a high school or college student to scan and file.  Then call Shred It to come get the whole pile.

PS.  We will not be switching to ATX for tax this coming season as we had planned.  There are so many changes in the tax code that it will overwhelm us and staff to learn a new program and the new law simultaneously.  Also, there is a little more confidence that UT will be at least a little better at getting the new programming right.  It better for the $18k it costs.

[TAXMAN]

Thanks all. We have been canning most of the stuff last 3-4  years. It is stuff I have from about 2012 back to about 2004. How well do you trust the shred it people?

[Abby Normal]

Our file room is almost empty. We've been saving PDFs of returns and records since 2003. This summer we've been shredding like mad. We use a shredding service that shreds in our parking lot.

[Catherine]

51 minutes ago, TAXMAN said:

How well do you trust the shred it people?

For small jobs (not yours) Ship 'N Shred will come fetch and then send you a certificate of destruction.  For the larger groups - I'd look for one where the truck comes to you and you can see them dump it into the grinder in front of you.

[Gail in Virginia]

23 hours ago, Medlin Software said:

Whatever your legal (and legal defense) requirements are only.  Not so finite to be destroying every day, but grouped by an annual "destruction day".  Separate cabinets grouped/marked by date to be destructed.  (From the idea that if not required to have cannot be used against you, and no good deed goes unpunished.)

I think Medlin is making a good point here about information you don't have not being used against you.  Once we store something electr5onically we tend to keep it FOREVER.  Is that really a wise course?  Should we be looking for a timeline to delete files as well as the old timelines for destroying files? 

[Abby Normal]

Yes, I need to develop a document retention policy and have all my clients sign and choose if they want a longer period retained. I was thinking I'd keep 10 years but give the clients the option to keep as few as 4 years or as many as they wish. I've had to refer back to 10 year old returns before.

One problem I have is that my backup provider keeps deleted files forever, theoretically. So a backup would be available in case of a court order. There is a cumbersome process I could go through to remove those files from the backup server... or I could switch to a new backup service after deleting a bunch of old files.

[Cathy]

That's why I love living in the "boonies".  I have a yearly paper bonfire.  Tried my shredder but too many staples.  The fire is beautiful also especially when the weather cools down.

[Catherine]

On 10/21/2018 at 11:59 AM, Cathy said:

The fire is beautiful

I miss burning the leaves in the fall...