$7,000.00 Horror Story

Yesterday I almost had a nervous breakdown.  I had received a notice from the IRS that I owed $7,000 due to unreported income.  

WHAT?  My mind was spinning.  How could this be possible?  There was simply no way this could be true.  

What saved me from going completely over the edge?  Organized, accessible records.  After a few clicks, I was able to retrieve the tax information and there it was; the income that we DID report.  And the taxes.  And everything we were supposed to have remitted..  Our ducks were absolutely in a row with this one.  Unfortunately we now have to send in a special form with the documentation.

The lesson here?  The burden of proof is always, ALWAYS on you. YOU are the guardian of your information and documentation and you need to keep it updated and accessible.  It has to be there when you need it.

Decide if you are going to save hard copies or electronic copies of your documents.  It doesn't matter which one you choose, just be consistent.  As a Professional Organizer, I recommend electronic  record keeping with the following caveats
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• Do frequent backups (weekly for your e-device)
• Create a separate offsite backup file.  You can do this either on a thumb drive or save to a disc and put this in your safe or lock box.  Make sure to replace the duplicate several times throughout the year.
• Cloud storage is an excellent option.  There are several systems that will backup all of your e-device information for an annual fee.
• Keep your own cloud storage for your personal information. Click here to get a sneak peek at what I use)
• Consider giving your password to your secure information to a trusted person so that they can access in case of emergency.  

Off to request that special IRS form.

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