Did you know that April is “Records and Information Management Month (RIMM)?” — What a coincidence that it should fall on the same month when we are filing our tax returns. Or, at least, filing for an extension. — RIMM was established to recognize the importance of records and information management (RIM) in government and business. However, RIM also plays an important role in the home.
Paper management at home and the home office can be a daunting task. Do you keep your papers, or do you shred them? If you are keeping some papers, how long and where do you keep them? A good resource to help you answer many of your questions is Managing Household Records on the USA.gov website. Shredder, beware! I would like to caution you regarding the Tax Records item, which says to keep tax records for seven years. While you can destroy the supporting documents after seven years, you should keep the original federal and state forms as well as any W-2 for each year.
I learned this the hard way. Long before I became a professional organizer, I shredded several years of tax documents, including federal and state forms, as well as the W-2s. That came back to bite me when I noticed that the Social Security Administration made an error and had not applied my 1994 social security earnings to my Social Security. When I called to rectify the error, the SSA asked if I had my 1994 W-2 and 1040. Well, I didn’t because I had shredded them. When I called the IRS to request a transcript they told me they didn’t keep records that far back. Fortunately, I contacted my place of work and they were able to come up with a copy of my W-2. Shredding these documents is not a mistake I will make again.
You can probably digitize your past tax forms. However, I don’t know if the IRS accepts the digitized copies, so you should verify with the IRS before you digitize your 1040 forms. If you still have questions about how long you should keep your financial documents, check with your accountant or your financial advisor.
Happy Records and Information Management Month!