IRS Recommendations & TaxCaddy

IRS Recommendations & TaxCaddy

One of the main compliments we hear about TaxCaddy is that it makes filing season easier for taxpayers.  Filing your return can be frustrating because of all the information you need to give your accountant.  You get documents in all through the year, but you don’t really use them until about February.  So, what do you do with a donation receipt you get in September? Often, people have a file folder, a pile, or a drawer in their home where “important” papers are stored.  While those systems work ok, the IRS (and your accountant) would prefer you keep this information a bit more secure and organized.  This blog is going to cover specific IRS recommendations on best practices for organizing your documents and how using TaxCaddy makes it easy to follow their advice.

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Staying Organized

The IRS says “good tax planning includes good record-keeping”.  We’d like to show you how “easy tax planning includes using TaxCaddy” by comparing IRS recommendation to TaxCaddy features.

IRS Recommendation: Taxpayers should develop a system to keep all their important information together. They can use a software program for electronic record-keeping.

TaxCaddy: TaxCaddy IS an electronic record-keeping system.  And it’s free for hb&k clients to use!

IRS Recommendation: Throughout the year, taxpayers should add tax records to their files as they receive them. Having records readily at hand makes preparing a tax return easier.

TaxCaddy: All you need to do is download the app.  Each time a new piece of paperwork comes in, just open the app and take a picture of the document.  TaxCaddy saves it as a PDF and that’s it! You can shred the paper instead of storing it away in a drawer somewhere.  It works the same way your banking app does when you take a picture of a check.

IRS Recommendation: In general, taxpayers should keep their documents for three years from the date they file the return.  These documents include anything supporting income (W-2s, 1099s, K-1s, receipts, investments), deductions (charitable donations, mileage, medical payments), and all records relating to property disposed of, sold, and/or purchased.

TaxCaddy: If you’re not using TaxCaddy, that’s a lot of paper that could be easily lost or accidentally destroyed.

Staying Secure

Did we really just say accidentally destroyed? We sure did. And the IRS addresses this as well.

IRS Recommendation: Taxpayers should prepare for natural disasters such as floods, wildfires, and hurricanes by updating their emergency plans and by keeping tax documents in a safe place. From tax documents to bank statements, and tax returns to insurance policies, make sure these items are stored digitally and not only on paper.

TaxCaddy: Although TaxCaddy is meant for your tax documents, you can add in any information you want (just remember your CPA can see it). Your account is yours forever – it does not belong to hb&k.  It is also incredibly secure.  So, in addition to protection from natural disaster, TaxCaddy’s three layers of encryption protects your documents from cyber criminals who use tax information to file false returns.

*Bonus: Leaving papers somewhere in your home leaves you vulnerable to identify theft in the case of a disaster such as a burglary.  TaxCaddy is provides extra security, so even if you have the app on your phone or computer and then lose that device, your account will still be secure.

Get Signed Up

These are only a few of the benefits of using TaxCaddy. For the last two years, hb&k clients have been using (and loving) it.  Those who have adopted the system agree it is easier and less stressful than storing, finding, and bringing in paper documents. If you’re a client and you’re not signed up, learn more about TaxCaddy on this blog and then email me if you have any questions!


Kari Wolfe is our Creative Content Director & TaxCaddy guru.
Email Kari with any questions.
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