Year End Tax Memo: Fill & Download for Free

Managing household records can be tricky, not to mention time consuming, even for the most uber organized person. The fact is you don’t need to keep all receipts and bills. In general, you’ll want to hold on to receipts related to tax-deductible expenses or those that are necessary to take advantage of a warranty. You’ll also want to keep receipts of major purchases for your insurance purposes. Below is a detailed list of what to keep and what you can toss out.Throw Out Now:Old phone bills (unless you intend to deduct a portion of your phone bill on your taxes)Supermarket receiptsOld utility billsThrow Out After One Year:Canceled checks (except those you need for tax or insurance purposes)Store receipts, online order forms, and credit card statements (except those you need for tax or insurance purposes or for proof of purchase necessary for a warranty)Throw Out After Three years:Bank statements (which you may need to produce if your audited)Save Forever:Birth certificateCollege transcriptsCredit card agreement (for as long as you have the card)DiplomasDivorce decree and property agreementHome improvement receipts (if you own your own home)Home inventory listInsurance policiesLoan agreementsMarriage certificatePassport (current one)Pension plan and/or retirement plan documentsReceipts for major purchases (to use as proof in case of a fire or burglary)Social Security cardStock purchase agreementsTax returns, additional tax forms, and supporting documentation (three years after you file your return, you can actually throw out the supporting documentation, such as receipts)Warranties (for as long as they last)Work performance reviews (including memos on job performance)Year-end pay stubs and bonus statementsYear-end transaction statements from mutual fund companies

The myth of the hibernating tax accountant is just that….a myth.In fact, accountants must track their clients’ business operations throughout the year, guiding them into making the most informed choices possible for tax and profitability purposes. Issues come up all the time requiring analysis of both the managerial and tax implications of proposed transactions.Tax laws and interpretations of those tax laws demand constant attention as information comes in not only daily but even hourly. I regularly read up to 1,000 pages of tax memos, tax related court cases, proposed tax legislation at both the federal and various states’ levels. Clients regularly ask me about those changes and ask if it will impact them.Clients will come in with notices of examination, collections issues, and other matters requiring a considered response.Businesses and individuals often are not ready to file by March or April, so that work on extended tax returns go on throughout the season to September and October.Then, too, some corporations operate on a fiscal year, so the due date may not be March but rather the fifteenth of some other month.Exempt Organizations must file by the 15th day of the fifth month after the year end, so calendar year organizations would have to file by May 15th and many non-profits adopt a fiscal year-end to mirror the Federal or state governments or the foundation with which they work.Defined Contribution and Defined Benefit Qualified Retirement Plans must be filed by the last day of the seventh month following the Plan year-end.In short, it is very difficult to plan vacations!

In the US, assuming the employer has paid into the state’s unemployment fund, they will get unemployment. This is considered an involuntary permanent layoff.In a few cases, the employer might have helped some or all find other jobs. That’s not the norm, but it does happen. An owner who’s retiring might assist staff as a thanks for their loyalty over the years.What happens to the personnel records likely varies from state to state. I vaguely recall that in New York State, records are either supposed to go to a trustee or to a state office. How many do, especially from small businesses, I have no idea. So it’s possible that after time you’d have no way of verifying your prior employment.The owner might box up the records and keep them at home. I’ve heard of at least one case where the owner must have just left them behind. A friend was working on renovating an old office building and they found 40+ year old business and HR records in one room.What I suggest, especially if you have reason to believe your employer is going to shut down (no buyout, no successor) is this:Save your last pay stub (you should really save them all). You may need that if the company never made arrangements for year end tax documents. Your last stub could be your only proof of earnings and withholdings at hand.Retain other documents (copies of reviews, business cards, memos to you discussing salary, job, duties, etc.). You might need this one day to back up that you worked there, when and what your job was.