Do you have a lot of medical bills that you pay on each month? Could those medical bills be deducted from your tax bill this year? I was helping my mother take care of all of her finances after my dad passed away. I didn't realize how many bills she had coming in each month for medical treatments that my dad had undergone months, even a year earlier. I started doing some research about medical bills and tax deductions. If you have medical bills, take a minute to read through this blog to gain some knowledge that can help you decide what you can do when tax time comes around.
In order to engage in adequate bookkeeping, you must keep the appropriate financial documents with you. However, with all of these documents lying around, there is a greater risk that some of these documents might be stolen or might end up in the wrong hands. In order to prevent this, you will need to know how to properly store and secure your financial documents.
Digitize Essential Files
One of the best ways to store and preserve financial documents is to have them digitized. Digital files do not decay or become illegible, unlike physical documents. There are also methods of securing digital files that are not possible if they are kept in their physical form. Digitizing your files involves scanning them and converting them into an image or PDF. This can be carried out using any scanner. The sooner the documents are scanned, the better because the ink will be less faded and the document will be easier to read. Make sure to review each document after scanning it to make sure that it doesn't need to be scanned again.
Secure Digitized Files
Some individuals may be concerned that digitized files may be accessed by hackers. However, this can be prevented by having your documents stored on a flash drive or external hard drive. That way, the documents will not be accessible to hackers unless they gain physical access to the device. Then, various methods can be used to secure the device such as placing it in a safe or hiding it in a surprising location, such as in one of your socks.
Destroy Unneeded Documents
The best way to keep financial documents out of the wrong hands is to destroy them by shredding them or deleting them and using a file shredding program. When shredding physical files, us a cross-cut shredder. One way to further destroy files is to use the shredded documents as compost for your yard. The documents will decay in your yard and it would be impractical for an identity thief to search through your compost.
Consult With An Accountant
However, before destroying a document, it is important to verify that you will no longer need it. To determine which documents are best to destroy and which documents should be kept, consider hiring an accountant like Hoff John CPA PC as a consultant. This professional can be trusted to review your financial documents, file them and determine which documents can be safely destroyed.
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