When you pay bills, separate out any that can serve as documentation for a tax deduction.Create another hanging file folder (or folders) for tax-related documents.Label a dozen hanging file folders, one for each month of the year.(That’s what I do.) But a one-year backlog for non-tax-related documents is almost certainly sufficient. Freedom Filer has labels for odd year and even year months, which allows you to keep a two-year backlog. What I recommend - and I got this idea from Freedom Filer - is instead of filing paid bills by payee, file them by month paid. (All the electric bills together, all the credit-card bills together, etc.) Or, more accurately, they’re letting the paid bills pile up because it’s such a pain to file them by payee. Most of those clients, at the time I meet them, are doing what I used to do: they’re filing the paid bills by payee. Do you hang on to the paper bills that your creditors send you after you pay them? (Do you even receive your bills in the mail anymore?) A certain percentage of my clients have either gone paperless or automatically shred the bills after paying.īut a larger number of clients (and my family as well) receive most of their bills in the mail and hang on to the paid bills for at least awhile.
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