The end of the year is a good time to check in on your financial plan. It’s also a good time to go through documents accumulated over the course of the year and determine what you need to save and what can be shredded! With sustainability in mind, a good first step is to go paperless when possible. Then, have a system in place. Here are a few tips to help you get organized:

• Make sure you request PDF copies of important documents, like your tax returns.
• Establish a filing system on your computer.
• Have a scanner or scanning app in place. Here is a good article reviewing scanning apps for your phone.
• Since computer hardware can go bad, have a backup storage system in place. We have a “vault” offering in our client portal that allows clients to store and save files securely and it’s not on their home desktop!
• When you are ready to get rid of documents, shredding is the best option to protect yourself from identity theft. Especially if any personal information or account numbers are on the document.

Start preparing for next year’s tax season now

In December, we spent a lot of time syncing up with our client’s tax advisors to ensure we were taking advantage of every opportunity to be tax efficient for our clients this year. Saving important documents and keeping your records organized will help make tax prep that much easier come March/April. Keep digital records of your tax return AND the below-supporting documents for three years. (There are a few circumstances when taxes should be kept longer; you can read more about them on the IRS website.)

• Proof of income – dividends, interest, bank statements, brokerage statements, W-2s, mutual fund statements, and 1099s
• Deductions – medical and dental expenses, childcare, and charitable giving
• Receipts – invoices and mileage logs
• Residential real estate– closing and tax documents. AND keep receipts for any home improvements that you have made each year on your home, so you can track its cost basis over time

Keep original hard copies of the below important records forever. Because photocopies or scanned images of these legal papers are usually not valid, store these originals in a safe place.

• Marriage licenses, divorce, and custody decrees
• Birth, adoption, and death certificates
• Wills, trusts, and financial and medical powers of attorney
• Passports and citizenship papers.
• College transcripts and higher education records
• Military records

Recommendations on other documents to keep and for how long. Here are some additional documents we highlight for our clients to keep that may not always be top of mind.

• If the individual made taxable gifts or received an inheritance, they will need to keep associated filings in their permanent file.
• If the individual has made nondeductible IRA contributions, they should retain Form 8606 to document both the nondeductible IRA contributions and subsequent distributions.
• Form W-2s (for annual wage income from an employer) should be retained until the individual begins collecting Social Security benefits, in case they need it as proof to correct an error in their work history in order to maximize benefits. Make sure you create your online Social Security account as well!
• If you have a Health Savings Account and are paying medical expenses out of pocket, you should keep a record of who you have paid, the amount, and the date of payment as long as there is a balance in the HSA. Using your HSA as a supplement saving vehicle for retiree medical expenses is at the top of the list in our hierarchy for retirement savings.
• If investments were purchased prior to 2012, you, as the investor are responsible for maintaining and documenting cost basis records. Investments purchased in 2012 and later will have their cost basis tracked by the financial institution, which automatically reports the cost basis on their 1099 when sold.  And if you end up having a security and you do not know the cost basis you can always consider donating it to your donor-advised fund!

Getting and staying financially organized is an ongoing process that requires time and insight into the latest tax laws and legislative changes. At Artemis Financial Advisors, we can help you stay up to date on all the current events, economic, and geopolitical changes that could affect your financial plan and your portfolio. Whether you have $500 or $500 million, getting organized is one of the first steps towards improved financial health. We are here to help.