how to get away from paper files??

[snowshoe]

Every year i hope to investigate this issue. And every year I dont feel ready to make the switch. Do you scan & store your office files (8879's, IDs, notes, w2s)? If so, what equipment do you use? (looking for a good/dependable/uncomplicated scanner) And how does the software work? Can I just look up files? Do I create a folder for each files scanned or can the software do this? How do you back this info up in case of HD failure? The software I see wants you to store info in the 'cloud'. I'm not doing that.

Seems like there should be an efficient way to accomplish this- but I'm just not knowledgeable in this area. Thank you in advance for your time!

[spanel]

Every year i hope to investigate this issue. And every year I dont feel ready to make the switch. Do you scan & store your office files (8879's, IDs, notes, w2s)? If so, what equipment do you use? (looking for a good/dependable/uncomplicated scanner) And how does the software work? Can I just look up files? Do I create a folder for each files scanned or can the software do this? How do you back this info up in case of HD failure? The software I see wants you to store info in the 'cloud'. I'm not doing that.

Seems like there should be an efficient way to accomplish this- but I'm just not knowledgeable in this area. Thank you in advance for your time!

I do a multi level backup system.

All files for each client are stored in folders by ssn.

The server that these are stored has 2 hard drives that are cloned (in case 1 fails, we keep going, just replace bad hd)
This server is backed up to an external hard drive (nightly).
This server is backup up to a server at my personal residence (nightly).
This server is backup to the cloud (nightly). DO NOT overlook this option as it might be your last ditch effort to recover files. (all my files are encrypted pdfs or tax software encryption, so we are okay).

Chris

[KarenMM]

Fujitso scansnap S1300 scanner and external hard drive backup

I started scanning a number of years ago, and just recently let go of my paper copies.... DISCLOSURE: I have VERY few tax clients now, so my system may not work for high-volume folks:
Each client has a folder - within that folder is each year. I have asked my scanner to name the scanned file "source docs", and I typically scan all the source docs as one document. Sometimes I have a source docs - income and a source docs - expenses. I found that going back to a client's return, I typically wanted to see all of the source docs anyway, and this system allows me to look through them in tax return order, which is how I set up the scan. I also scan the copies AFTER I have reviewed the return, so my highlighted "tickmarks" are part of my documents scanned.
The only thing I don't scan is the 8879 form that the client has signed and returned to me with their check.

My backups could use some work. I backup onto an external hard drive (I have 2) that I switch out every week.... the theory being that I would have one with me offsite. But since I do not encrypt yet, I don't feel comfortable bringing the drive with me.... I have an appointment with a security guy who spoke at a recent continuing ed class so he can set me up with some automatic encryption on the hard drive. I will also NOT backup to the cloud yet....
Hope this helps

[ATSMAN]

Every year i hope to investigate this issue. And every year I dont feel ready to make the switch. Do you scan & store your office files (8879's, IDs, notes, w2s)? If so, what equipment do you use? (looking for a good/dependable/uncomplicated scanner) And how does the software work? Can I just look up files? Do I create a folder for each files scanned or can the software do this? How do you back this info up in case of HD failure? The software I see wants you to store info in the 'cloud'. I'm not doing that.

Seems like there should be an efficient way to accomplish this- but I'm just not knowledgeable in this area. Thank you in advance for your time!

Do you use a professional Tax Prep software? Does it have a module for electronic document storage and retrival.

In my opinion almost all the top tiered tax prep software have that capability? There may be a few low cost software that does not have this capability. Many years back I used to use one of them low cost software and I had to create my own folders and scan documents using the scanner software.

I use Drake and the document manager lets me scan all the input documents, stores a pdf of the return etc. for each Tax ID #. The folders are created automatically and any document, scan or pdf generated is stored there. Makes the job much easier. Make sure you have a heavy duty scanner.

[DonB]

encryption

You can set Scansnap to generate pdfs with a fixed or unique password and the files will be encrypted.

[snowshoe]

What machine & software should I look at?

I use proseries

What machine & software should I look at?

Do you use a professional Tax Prep software? Does it have a module for electronic document storage and retrival.

In my opinion almost all the top tiered tax prep software have that capability? There may be a few low cost software that does not have this capability. Many years back I used to use one of them low cost software and I had to create my own folders and scan documents using the scanner software.

I use Drake and the document manager lets me scan all the input documents, stores a pdf of the return etc. for each Tax ID #. The folders are created automatically and any document, scan or pdf generated is stored there. Makes the job much easier. Make sure you have a heavy duty scanner.

[ATSMAN]

I use proseries

What machine & software should I look at?

Have you checked out: https://proconnect.intuit.com/proser...ive-documents/

Try this if you buy a Fujitsu scanner: http://www.fujitsu.com/us/products/c...s/fi/software/

[Lion]

Talk with your Intuit rep.

[Bucky]

I like paper!

[ATSMAN]

I like paper!

Nothing wrong with that as long as you have enough filing cabinets and room in your office!

Buy stock of paper companies!

[TAXNJ]

Equipment discussion. Check this prior post

http://forum.thetaxbook.com/showthread.php?27372-Scanners&highlight=Scanners

[Rapid Robert]

I started scanning a number of years ago, and just recently let go of my paper copies....

I also scan the copies AFTER I have reviewed the return, so my highlighted "tickmarks" are part of my documents scanned.
The only thing I don't scan is the 8879 form that the client has signed and returned to me with their check.

There is a difference between going paperless, and archiving old paper documents after use. There is nothing wrong with archiving paper documents, but it is not really taking advantage of paperless.

The way to go paperless is to just do it. If you are changing long-standing habits, it might be painful at first, just like switching your tax software might be. But worth it.

The first big benefit is that both you and your clients will rely less on printers. I have a very old, slow-speed laserjet which is quite adequate for my practice as I only have 2 or 3 clients who insist I provide paper return copies. And you can be sure that many of your clients, at least the ones pre-retirement age, will appreciate not having to dust off their old printer at home, if the even still have one.

The second big benefit is your physical desktop: I never have piles of client documents sitting around, I never have to worry about hiding them from anyone walking by, I don't have to worry about losing them. My desk can be smaller!! And if I had any staff working on returns, it would be super-easy to hand off any work in progress back and forth.

Here's what paperless can look like, and it is the way I work with most of my clients.

1) engagement letter is delivered via email with a link; it is signed electronically through my vendor at cost to me of $1. Client can easily esign even on their smartphone, and since it is not an IRS document, the esign standard can be more relaxed. Big win: audit log of date/time and network address of the signing event, so client cannot easily deny they signed it in event of a dispute.

2) Yes/No questionnaire is delivered online, client can fill it out on screen and the results are sent back into their tax data file (as memo data, for reference as I prepare the return). Again, a small fee from my vendor.

3) Clients download their W-2, 1099s, etc. and upload them to my portal. If they have paper source docs, either they scan and upload PDF to my portal, or I take their paper and immediately scan, so that I can return their paper right away. My tax season paper file never gets thicker than about 10 inches during the season.

4) I use Adobe Acrobat to organize and annotate documents. Tick marks in different shapes and colors, text box showing calculations and notes, all are very easy once you learn a few basics of how to use Adobe. You need at least two computer monitors, of course, to make this work. I NEVER prepare a return from paper documents directly.

5) review copy of tax return is delivered as PDF file to client via portal; and efile authorization signatures are gathered using my vendor's IRS-compliant service. For most of my clients, Form 8879 never exists in paper form, ever. But if they prefer to print, wet sign, and scan or photo a copy back to me, that's fine too.

6) Final return PDF is uploaded to my portal, where client can continue to access it as long as they are my client.

7) most of my clients pay me online using Intuit Quickbooks payments, they get the link automatically from Intuit when I email the invoice, they do not have to create a login just to pay me, and I never handle their payment info (even though it is usually the same as the bank info in the tax return). Only costs $1 per payment no matter how large, and all but a very few of my clients are comfortable with this method (for the others, I use Paypal or will accept a paper check, but the inconvenience of getting the check to me on time is on them).

You may guess that I rarely meet with my clients in person, especially not after the first season. Email works fine for gathering more info or explaining choices to the client, and that way it is all documented and logged, what we said and when.

[FEDUKE404]

Getting rid of paper

Rapid Robert --

While I applaud your successful efforts to do virtually everything electronically, there are simply a lot of tax preparers (and their clients) out there who choose not to go with that approach.

Many of my clients have "some years" on them, and a fair number of that group have nothing to do with computers/internet. (Sometimes health/vision/etc can also become a factor.) I have a couple of clients who absolutely refuse to receive/send ANYTHING sensitive over the internet. (Yes, I know there are ways to do that.) On the opposite side, I have clients who use encrypted/password-protected corporate emails to tell me something like "I paid Dr. Jones $217 last year."

Fortunately, I stand my ground pretty firmly and insist (as the IRS "requires") that everyone efile. I think that is a wise approach for all parties concerned. Absent a true problem that would prevent such. . .EVERYONE efiles!

I am a bit curious as to whether providing an electronic copy (PDF etc) of a client return meets the fine print for providing a client a "copy" of their tax return? If so, fine, but I will continue to provide each of my clients with printed cover letters, an invoice, and a complete copy of the filed tax return for their records. Yes, I know it's my choice and some may disagree with my decision. FWIW, I also think it adds a bit more professionalism to the product/services I provide to long-term clients who have come to expect such.

Just my 2¢ worth.

FE

[Rapid Robert]

I had one big advantage over many, in that I only started my own tax practice five years ago (prior to that, worked as employee for several firms), so my clients are mostly self-selected as those comfortable with technology. Yes, I have some over-65 clients, but many more younger than that. (And it's not always the older ones who want paper or don't trust the internet!).

[Rapid Robert]

"I am a bit curious as to whether providing an electronic copy (PDF etc) of a client return meets the fine print for providing a client a "copy" of their tax return?"

Yes. See §1.6107-1(a)(2).