Tax docs to retain

[AZ-Tax]

I always retain either a carbon copy of the original tax document, an original if there is more then one original or a copy of the original if only one original. Is this over kill?

Would a copy of all originals be sufficient?

[Jiggers]

"Carbon Copy?

I always retain either a carbon copy of the original tax document, an original if there is more then one original or a copy of the original if only one original. Is this over kill?

Would a copy of all originals be sufficient?

Is there "Carbon" paper any more?

I make a copy of all client documents and return all originals. I make notes on my copies, and not the clients.

[Gretel]

Same here. But since I will be using a scanner this year I will use original documents for data entry and will put check mark on them. Any handwritten document I have to write on I still will copy and not write on clients original. In the end I will scan in all docs.

[powerage]

Except where actual signatures are required, we keep everything in the software. So I have little paper work. My boss hates paper, she says it takes up way too much room. I agree.

[Black Bart]

Copies

I always retain either a carbon copy of the original tax document, an original if there is more then one original or a copy of the original if only one original. Is this over kill?

It's up to each individual preparer and It's only overkill if you worry about it too much. I used to keep originals if there was an extra (felt better about it for some reason), but all those odd-shaped pieces of paper were unhandy to staple to the back of my copy of the tax return (which is where I keep all their junk). So I started photocopying everything and giving all originals back to the client (except EF signatures & a few others).

Would a copy of all originals be sufficient?

I think so. Copies of laser-printed documents are as clear as originals and you can just set the copier to "dark" for the often lightly-printed "carbon/carbonless" W-2s still used by many small businesses.

[David1980]

Except where actual signatures are required, we keep everything in the software. So I have little paper work. My boss hates paper, she says it takes up way too much room. I agree.

I've done this in the past, but now keep a PDF copy around. I would guess if you're using a major software and intend to stay with them forever it wouldn't be a problem. But if the software company ceases to exist or you change software companies and somehow the software stops working or you buy a new computer and can't get it running the data is useless.

[Matt Sova]

Crack up

I've done this in the past, but now keep a PDF copy around. I would guess if you're using a major software and intend to stay with them forever it wouldn't be a problem. But if the software company ceases to exist or you change software companies and somehow the software stops working or you buy a new computer and can't get it running the data is useless.

So you keep a pdf? What if Adobe is outdated? File Cabinet Solutions by Thomson Tax and Account (use to be Creative Solutions) stores everything neat and orderly in individual "drawers". Where do you keep the pdf's? How orderly is that? If I decide to switch at some point I will transfer everything to the new software, which, more than likely they will do for me. One more thing, why would a new computer keep your software from working?

[tilt53]

Matt, so many of us still use XP and don't want to migrate to Vista. They still don't support many of the old programs that serve us well. I don't want to have to go out and spend my hard-earned money for a new printer or programs just because my operating systems is snooty. For example, I only do billing on Quickbooks 2003 Pro. Why should I have to spend several hundred dollars to update a program that works?

And it's only going to get messier as they try to push us to upgrade/purchase Windows 7.

And again, what if you change software companies? Is the new company going to be in a compatible format with the old one? So many things to consider. ProSeries has DMS. Big deal. So I change to someone else and can't access or import the product. That could be quite costly to me.

[David1980]

So you keep a pdf? What if Adobe is outdated? File Cabinet Solutions by Thomson Tax and Account (use to be Creative Solutions) stores everything neat and orderly in individual "drawers". Where do you keep the pdf's? How orderly is that? If I decide to switch at some point I will transfer everything to the new software, which, more than likely they will do for me. One more thing, why would a new computer keep your software from working?

Uh, I guess you have a point about adobe becoming outdated but it's far more likely that just about every other program in existance is going to stop being supported first. Adobe also has many alternative readers including open source ones. I guess you could ask "What if computers stop existing?" because it's about that far of a stretch to worry about not having a program capable of opening PDFs. In fact, with MeF the IRS is going to allow PDF files for forms not processable through XML. Also, when you download forms from the IRS you are downloading themin PDF format. It's a standard format.

I keep the PDF's in my custom file structure.

PDF directory\tax year\client SSN\tax return

if they have more than one tax return or any amended returns it goes in the client SSN directory. The directory structure could be modified to fit whatever you want. Heck, you could put them all in a MySQL/other database if you really wanted. A lot of flexibility here because it doesn't tie you to any one company.

Then the whole thing is backed up to a USB drive & also an online "backup" storage system (in a password protected zip file).

The only downside is it does take an additional step once the tax return is done to print it out to PDF.

On the other hand, the odds of me changing software companies for my tax software is much higher risk. And although I'm happy with them at the moment that can change. Or they can be bought out. Or go bankrupt. Or who knows.

[David1980]

If I decide to switch at some point I will transfer everything to the new software, which, more than likely they will do for me. One more thing, why would a new computer keep your software from working?

Most of the tax preparation softwares I have used only do a limited conversion. The primary objective being to convert enough of the data that contact information, dependents, and carry forwards will come to the current year. So you often end up with a "converted" return that is missing all softs of stuff in the prior year return, and no conversion for returns past that.

As far as a new computer stopping software from working. If you no longer have the install disk, or you have the disk but not the updates, or the software requires activation to be installed you would need to get support for the old software. If you're no longer a customer of them they likely will tell you to get lost.

Also, some software does not work with Vista.

[powerage]

I've done this in the past, but now keep a PDF copy around. I would guess if you're using a major software and intend to stay with them forever it wouldn't be a problem. But if the software company ceases to exist or you change software companies and somehow the software stops working or you buy a new computer and can't get it running the data is useless.

We use Drake, so no problems there. That, and I have 2 bosses who worry about things like that. We do keep a copy of the DL or other photo ID and a separate copy of the SS#, which are then attached to different signed forms, plus an interview sheet that the taxpayers fill out. We keep on file just what is required to be physically signed by the client.

I'm happy to be using less paper myself for a change.