Keeping Records for IRS

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isufbcurt

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Another dumb question...when a company creates an IRS form (W2, 1098, etc), is that on file with the IRS? Meaning, does it go to me and the IRS? Or only to me?

Yes they submit a copy to the the Social Security Administration, who then shares it with the IRS. The IRS then will run some program to match any W2's, 1099's, etc that have your SSN against your submitted tax form to determine if you included those on your tax return. If you didn't you will most likely get an adjustment letter from the IRS.
 
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IcSyU

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Yes they submit a copy to the the Social Security Administration, who then shares it with the IRS. The IRS then will run some program to match any W2's, 1099's, etc that have your SSN against your submitted tax form to determine if you included those on your tax return. If you didn't you will most likely get an adjustment letter from the IRS.
My first step in cutting down on tax fraud: Require documents to be submitted electronically 1/31.
 

Cycsk

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Why wouldn't I keep all my tax records forever? What is to gain, other than space, by getting rid of them? I live with a bit of irrational fear that someone will make an accusation of me being a "Marty Tirrell type" and I want to be able to prove that everything I've ever done is proper. If I have all the documentation to prove it, why would I toss it away?
 

Trice

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Good point. I should really just scan all my documents in and have them in PDF format. I'll add that to the list of things to do this go around.

Not to hijack the thread, but while you are scanning in those documents you might consider going paperless entirely - scanning in everything else you've got and then shredding it. Years ago I went from four file cabinet drawers to effectively zero. And now my documents are in a unified filing system and all backed up online. Not to mention the extra space in the house.

It's a big undertaking, but once you're done with it, it's easy to maintain. You shouldn't have that much to scan in each year since most documents are sent electronically now.
 
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throwittoblythe

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Not to hijack the thread, but while you are scanning in those documents you might consider going paperless entirely - scanning in everything else you've got and then shredding it. Years ago I went from four file cabinet drawers to effectively zero. And now my documents are in a unified filing system and all backed up online. Not to mention the extra space in the house.

It's a big undertaking, but once you're done with it, it's easy to maintain. You shouldn't have that much to scan in each year since most documents are sent electronically now.

Agreed. It's a great idea. We've been doing lots of purging this year anyway. My wife is a bit of a pack rat. I'm just now convincing her that she doesn't need to keep most day-to-day receipts once the charges have cleared (e.g. we don't need to keep Hy-Vee receipts for a whole year).
 

Trice

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Agreed. It's a great idea. We've been doing lots of purging this year anyway. My wife is a bit of a pack rat. I'm just now convincing her that she doesn't need to keep most day-to-day receipts once the charges have cleared (e.g. we don't need to keep Hy-Vee receipts for a whole year).

Exactly. Once you have your bank and credit card statements for the month, and they've reconciled, there's no need to keep receipts unless there's a purchase you might need to return.

Your comment on purging is exactly right. I've been on that kick for years, and an experience we had having to deal with family members and their possessions only accelerated that instinct. It's important to think about your stuff and how your spouse or kids will deal with it after you're gone.
 

cyinne

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Has anybody used the receipt scanner programs that will file away on the cloud? Are they reliable? Which one is best? Ive thought of buying one several times but chicken out at the end.
 

Trice

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Has anybody used the receipt scanner programs that will file away on the cloud? Are they reliable? Which one is best? Ive thought of buying one several times but chicken out at the end.

Without knowing anything about your situation, I might suggest just getting a full document scanner, to give you the flexibility to scan documents of all sizes.
 

cyinne

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Without knowing anything about your situation, I might suggest just getting a full document scanner, to give you the flexibility to scan documents of all sizes.
Pretty ordinary situation- just farmer with a wife that works at local hospital. We do have a printer/scanner combo but I would rather not have all those documents only stored on our computer in case of a hard drive crash (which has happened before). Id like to have a couple different modes of backup. I am not a real big fan of external hard drives as I am not super tech savvy to use these efficiently- we have one to back up pictures and such since the crash and when I go to look and see if the information is on the external drive I find it very confusing to find exactly what I am looking for.
 

isufbcurt

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Has anybody used the receipt scanner programs that will file away on the cloud? Are they reliable? Which one is best? Ive thought of buying one several times but chicken out at the end.

A client of mine starting using one. Unfortunately they just bought it and went to town scanning everything they could find, then shredded what they scanned. Unfortunately there are some things in their filing cabinet I didn't want scanned because I need them every month and now they can't find these items in the cloud. They also scanned a couple important tax documents I needed to do there tax returns which they can also no not find in the cloud.
 

Trice

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Pretty ordinary situation- just farmer with a wife that works at local hospital. We do have a printer/scanner combo but I would rather not have all those documents only stored on our computer in case of a hard drive crash (which has happened before). Id like to have a couple different modes of backup. I am not a real big fan of external hard drives as I am not super tech savvy to use these efficiently- we have one to back up pictures and such since the crash and when I go to look and see if the information is on the external drive I find it very confusing to find exactly what I am looking for.

Generally, you want one local backup (like an external hard drive) and one cloud backup in addition to the storage on your computer. Regardless of what scanner you use, if you have anything important saved on your computer it is critical you back it up in some way.

An external hard drive is easy enough to use. Every couple of weeks, just connect it to your computer, then copy/paste all the files on your computer back into the external hard drive. So then whatever file system you have on your computer is duplicated on the external hard drive.

For the cloud, just find an online backup service like Carbonite, Backblaze, iDrive, etc. There is cost involved (usually around $60/year) but they have big capacities so you can store documents, photos, video, etc. They're usually pretty intuitive to use, and just like the external hard drive, whatever file system is on your computer should carry through to your online backup service.

It's definitely worth spending some time to think through a file system so it's easy to locate later. Just a few folders (and sub-folders) can go a long way.