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Going Green With Your Financial Records.

January 13, 2011

I never thought of myself as a pack rat until I started the packing process before moving into my apartment. It wasn’t the endless boxes of clothes or shoes that amazed me, it was the giant stacks of papers and financial documents that I had accumulated. I was in paper overload. Problem is, I didn’t know what was ok to shred or what needed to be saved. I had bank statements from 2000, W-2’s from 2002 and tons of various 1099’s seemingly from every year of my existence. I felt wrong parting with all my financial data but I also didn’t want to upgrade to a 2 bedroom just for the storage.

According to the IRS, certain documents should be saved for a period of seven years (in the event of an audit–aaahhh!). You should save all documents that provide evidence of any income, deductions or credits claimed on your last three annual tax returns at minimum. To play it safe though, since the IRS can go back as far as six years, save documents going back seven years. These types of documents include W-2’s, 1099’s, bank statements, receipts, brokerage statements, mutual fund statements and even insurance records. Now when I heard this for the first time I thought to myself, okay so how does this make my paper load any smaller? The answer is electronic records. This is also the point where I did the happy-happy joy dance in sheer exhilaration of not having to lug an extra five boxes with me. Many companies keep their own electronic files and these records are, in many cases, available at no cost online. They can then be downloaded and saved as a PDF file. I wouldn’t rely on just saving these documents to your home computer because in the event of a virus or crash you can kiss those records goodbye. Try using a flash drive instead and make sure it stored in a safe place. Aside from being able to free myself from my paper chains, electronic record keeping has also enabled me to be green. By saving paper I’m saving a tree, and by saving a tree I can breathe a little more easier. Not only am I being responsible in my financial record keeping but I am also not negatively impacting my environment. Talk about feeling empowered and smart (go me!).

At GAI (www.gunwel.com) we support going green by being a paperless office. We would love to hear your thoughts and help you on your quest to be environmentally responsible so stop by or give us a call at 212-979-6830. See you soon!!

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