So you have been listening to me and have actually been doing a good job keeping the five to seven years of tax receipts I have recommended. Congratulations! Now you have a different problem – the storage problem! Those receipts take up a lot of space. Short of renting public storage, you just don’t have room for them. Now what?

Well, do you have a computer? Do you have a printer that can scan pdfs or software that can create it? If not, it is time to think about getting them! Taking all these documents and storing them on the computer in pdf format is the best way to save all the data without the storage problems. If you need to prove a deduction to the IRS or the state, you just have to find the right document, print it up and give it to the authorities.

Just remember a couple of points; setting up a file system on the computer and making backups so if the computer crashes you can recover the data.

1. If you have a PC and use Windows, it is relatively easy to set up a folder system to keep your various deduction and income receipts (plus your tax returns) in order. I am sure Apple has a similar system of filing (sorry, I don’t even have an IPod, but they have something.) There are also a thousand data management software packages on the market if you want something more elaborate.

2. Data backup is even more important! Computers lock up every now and then, so you need some package that automatically backs up all files and data so you don’t have to think about it until you need to restore the data because your computer blew up. I use Carbonite and I know others who use Mosy and love it. Either one costs less than $100 a year and provide peace of mind if a disaster happens (our desktop at home crashed and the only way to get it going again was to reload the operating system from the DVD – all files were formated and gone; Carbonite took about 12 hours but we got back all 7 years of family pictures (including the 2 years I forgot to put on disc), so I am still alive (my wife would have killed me!) plus all the other data on the computer.

For financial, accounting and tax musings,