What documentation do you keep in your files?

[taxea]

What docs do you keep in your files?

I set up a folder on my harddisk. In the folder is a file for each client. I scan worksheets, and every document that was used to prepare the return into this file. At the end of the season or whenever I need to I copy the file to DVD along with the current tax returns. I also PDF all returns to harddisk and copy them to the DVD file.

Amazingly I no longer need large file cabinets and can split the monitor screen if I need to look at the tax return and the client documents. This is handy when the IRS sends letters to the client for past year returns. taxea

[veritas]

The most important

developments in in-house tax preparation in my opinion are:

1. PC
2. Software
3. Laser Printer
4. Internet
5. E-File
6. Electronic filing Cabinet

[BOB W]

One more item .....

..... for your list should be an OFF SITE backup system. I use "Backup Solution". They drain all added or changed files every day.

[BOB W]

Jiggers> Can't see......

.... saving all that client info. Managing all that paper, folders and employees would drain my finances. How much protection from clients do you need? Seems it is an overkill.

Quote: "There is a level of quality that your client will never see nor appreciate and therefore never be willing to pay for it; therefore to provide that quality is a waste of your time and your money".

I bet you have a very busy office with all that paper and file management. You need to look at a better way to handle your clients papers. Start by putting the burden on your clients for record retention. A simple word to them, " Be sure to keep these records safe in case we need them at a later date", is all that is needed. 99% will do it. Probably 85% already do it.

I only scan w-2s, 1099Rs and 8879s. My program prints my copy of the tax return directly to CS's File Cabinet.

I have not tried dual monitors because my CS's Ultra Tax program has a feature where I just press the F8 key and last year's info shows up for the line that I am working on.

I have been paperless for 3 years now and have 6 full file cabinets in my basement that hold 2002 and back to 1975. Every so often I pull out old folders and burn them at the town incinerator.

The bulk of my returns are in the $200- $400 range. I can see if your client base is high-end returns, $500- $1,000+ where various workpapers are required to accomplish a multi-facited return. But in my 35 years of doing simple and complicated return (some in the $1,000 + area) I have been able to do these returns without all that extra work. But I am a 1 man show, for the most part, and I NEEDED to find ways to get things done efficently. It is easy to deligate file management when you have a staff. But REMEMBER, necessity is the route to efficiency. You don't have a reason to be effcient with all the staff you employ.

There is something to be said for a busy looking office during tax time, clients think you are in high demand and "the place to get a tax return done". I have never been good at finding people that can do quality work, so I do it myself. By the way, I do 450 personals and 85 entities. I pick and choose the clients I want and say no to the others. But I do miss a busy looking office, but I'm glad to see the money in my bank account.

[Jiggers]

High Speed Scanner? - Bob W

What high speed scanner do you use? The scanner I have is very slow.

[BOB W]

Scanner

I have an HP 5550. When a scanner is setup to "acquire source" you need to be sure it is the "WAN" source. The other source is the slow one. ( working from memory- I'm not at the office right now).

[taxea]

What doc do u keep in ur files

It isn't so much protecting yourself from clients, with me, it's having the necessary documents for the IRS notices 18 months later without having to ask the client to provide them again. taxea

[Unregistered]

documentation

We have about 1,000 1040 clients. That's a lot of paper to deal with. An offsite storage unit has been used in the past for anything back three years or more with banker boxes on racks. We are attempting to eliminate the unit and so for about 3 years, we have had Creative Solutions " Filing Cabinet Solution" It is great !!

We print a 1040 copy of the Creative Solution processed returns to FCS (automatically labelled Federal and State) and scan the documents provided by the tp to the clients drawer labelled "docs", returning those to the tp in their "White Folder" along with the copy of the tax returns. We also scan a copy of the invoice to FCS if it is not produced at the time of printing the tax returns. Very necessary in later years.

In the tp's file that is kept in the metal filing cabinet, we still retain a small paper file. We will keep a hard copy of the w-2's and 1099R's along with work papers, billing information, record of phone conversations, Projections or anything else that is not produced with the tax returns.

We do keep in the tp's file a manila folder with 3 sides closed that we consider a permanent file. We would put change of address forms, trust docs, div decrees, RMD worksheets, closing statements, basis info into it.

While we are working on the current tax return (CS) we can open up the FCS drawer of that client and refer to the return of any prior year that is stored there without closing the tax program. This is great to refer to as far as documentation. It reminds us what they had last year and will make it easy for the tp to supply us necessary info.

As we get older, it is more difficult to recall accurately how we arrived at some of the items on these returns. Sure helps if you have access to proof for you and your client and the government agencies. One thing we really like about CS is that when you send the copy of the tax return to FCS just before you create the ELF file, you are sure that this is the return that was submitted. Hard copies can always be printed from the FCS.