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conejo23

Question about tax organization strategies

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So I went to a meetup presentation at the Evernote offices here in Austin in February, heard Stacey Harmon give an excellent talk on going paperless. Really good stuff. The gist of it was "I'm not against using paper, I just don't KEEP paper".   And then, "have a strategy laid out ahead of time for how to deal with every kind of paper that enters your life." Simple, yet profound. I realized I didn't have all of that in place.

Anyway, as part of my newfound zeal for going paperless, I want to start digitizing all my tax inputs through the year so I'm not cramming stuff into a file, instead it's all categorized in Evernote. Now, I know some people have elaborate notebook structures and don't use tagging at all, and some have like one or two basic notebooks and use tags and searches to find everything. I guess I'm kinda in the middle, more on the notebook side, I don't make a whole lot of use of tags. But for taxes, I'm thinking it makes sense. Here's my idea, I'd like comment on whether it's sound or should be revised. 

I'm going to make a Notebook Stack called "2016 Financial Documents". In it I'll have a few different notebook, one for "2016 Taxes", another for "2016 Misc Receipts" (into which things would go that are not tax deductible). Then probably another for misc documents, like insurance policies, etc...

For the items I put into the 2016 Taxes notebook, I'm thinking about tagging them based on what kind of item it is. For example, if it's a W2 or a K1 it gets the "income" tag. If it's a charitable donation, I'm thinking the exquisitely creative tag of "charitable donation". Another for "schedule A deduction", "medical expenses", etc...  Then at tax time I can do searches from that notebook by tag and find everything grouped together.

Thoughts?

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1 minute ago, conejo23 said:

For the items I put into the 2016 Taxes notebook, I'm thinking about tagging them based on what kind of item it is. For example, if it's a W2 or a K1 it gets the "income" tag. If it's a charitable donation, I'm thinking the exquisitely creative tag of "charitable donation". Another for "schedule A deduction", "medical expenses", etc...  Then at tax time I can do searches from that notebook by tag and find everything grouped together.

By using notebooks, you're creating a filing problem.
That charity donation receipt can go into the Charities Notebook, Receipts Notebook, Charity A Notebook, etc
My approach is put the receipt into a general notebook (I call mine "Filing"
Tag it with "2016 Taxes", "Receipts", Charity A, etc
At tax time, you can do a search on tag:2016 Taxes and find everything grouped together

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Thanks for the response.

How am I creating a filing problem? There's no ambiguity for me, if it's an item that affects my taxes in any way, it goes into that year's tax notebook. It can't go into one of several different notebooks, only one.   It sounds like you have the approach of using notebooks as big buckets and then using tags to sort them out. That's not my paradigm, I'm less on tags and more on notebooks, and I'm not particularly interested in turning that on its head right now. But I do see this as a sound way to use tags to get a more granular view of what I'm putting into that notebook.

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2 minutes ago, conejo23 said:

How am I creating a filing problem? There's no ambiguity for me, if it's an item that affects my taxes in any way, it goes into that year's tax notebook. It can't go into one of several different notebooks, only one.

Thats exactly the problem - a note can only have one notebook, even if it matches more than one notebook

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On 4/3/2016 at 3:49 PM, conejo23 said:

But it doesn't match more than one notebook. It only matches one. 

ok - then you won't have a problem
But make sure you never create another notebook that might apply.
I'm sorry, I just don't see 2016 Taxes as a notebook, but its a personal opinion

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Yep. ALL receipts go into one of two notebooks, those that affect taxes, and all others. That's it.  

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@conejo23 - There aren't many different criteria that an Evernote user can base his structure scheme on. Examples are "Who", "What", "When", "Where", "Type". Given the issue you have raised, I would add "Purpose" to the list. When it comes to your 2016 Taxes, it seems to me that you chosen to define a Notebook around the "purpose" of the documents in your Evernote database and to use Tags to define the "Type" of documents (W2, K1). That's all well and good. I suspect it will work just fine for you.

I believe what DTLow was pointing out to you was essentially the reverse. That is, define your Notebooks around the "Type" of documents (receipts, and insurance policies, which you have already done) and define your Tags around the "Purpose" of the document (and documents commonly have multiple purposes). As I look at the names of my Notebooks, most of them conform to this structural scheme. One reason I like this structure is that the "Type" of a document isn't likely to ever change, while when I either create or obtain a new document (or, in general, information), I can't always anticipate the future "purposes" I might have for it. - - - In addition, as a user's Evernote database grows, I think this kind of structural scheme will be more effective.

And, of course, there is on other basic scheme. That is: 1 Notebook, no Tags, and add/use keywords with the title or body of the Notes.

But again, go with what you believe is going to work well for you with your 2016 Taxes. - - - My suggesting would be that you (and any Evernote user) sit down and spend 10-15 minutes and seriously think about what scheme you will use for Notebooks and Tags. Then, adhere to it as best as you can for at least a few weeks. Over time (months to years), I sense that a fair amount of Evernote users change their scheme as they become more aware of the kinds of material they have been putting into Evernote. - - - And it's not a big deal to change a scheme. One of the great features of Evernote is that it will allow you to change the Notebook or Tag of a large batch of Notes all at one time. 

 

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Another viewpoint. 

I put all of my tax related documents in my primary local notebook, mixed in with everything else.  I have a set of year tags, _2016, _2015, etc.  The underscore is used to for the tag drop down and for sorting by tag.  Relative to tax tags I use the list below, all of which are preceded with 1040.  Each tax note gets a year and a 1040 tag, and if I have a tag for the account, that tag, Chase for example.

I put the document type as the start of the note title with the entity after, 1099-INT Chase for example.  For charity notes I start the title with Contribution followed by the charity and the date.

In practice, the saved search -tag:1040.b* tag:_2015 tag:1040* returned all specific backup documents for the 2015 task year.  If I want to compare YOY, I can do a tag:1040.sched.a search and sort by either tag or title to see.  Or a tag:Chase tag:1040* search.  Sounds more complicated than it is I think.  FWIW.

 

ScreenClip.png

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Analyst444....that is a really interesting and (to me) innovate way to explain the organizational distinctions of notebooks vs tags, purpose vs type.

I've been using this notebook-centered paradigm for a year now and it seems to be working fine, but the truth is that Evernote's search capability is so strong that I'm usually able to find everything instantly. The only time I peruse a notebook is when taking a trip down memory lane. For example, I'm a Springseen fan from way back (1975) and have been to a ton of shows. I created a notebook just for these shows where I've put setlists, media show reviews, pictures, etc..., and I enjoy revisiting those from time to time, or notebooks around a vacation. But the majority of the time when I look for a document, search just finds it.

I try to use the title of my notes to be sort of a quasi-tagging system. I think about how I'd typically try to search for this document and then either title it accordingly or put in notes matching how I'd search for it.  I've got about 3,000 notes in my system now (and am actively digitizing a lot of paper files, that will probably be at 5,000+ by the end of the year at least), and maybe a few hundred at the most with tags.

I'm not sure why, but tags have always seemed to me like an extra layer of work, like an effort tax on using Evernote. So, I've resisted them. Title them in a way that makes sense, dump them in a notebook that makes sense, then forget about them until I need them. But this tax thing is my first foray into utilizing the app in a way that becomes an intrinsic part of a future methodological process where it isn't that I might need to find something, I HAVE to find it. And thus, I'm looking even closer at my organizational paradigm.

Thanks for the perspectives to all who have contributed. Good stuff and gives me some things to ponder.

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You are welcome.  Always good to remember that there is no "right" way to do it.  Per @Analyst444 distill to what works for you.  It's not that hard to adjust or tune as you go, more fun if you don't have to though.  ;)

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I have a different take on this. Evernote is cloud based. I would suggest either putting all your tax related materials into a local notebook so it does not sync to the cloud, but understand you can't access this notebook or add to it from other devices. OR encrypt files with information in them that you don't want anyone to have. This would include account numbers, social security number, etc. Once encrypted you can put these files into your notebook and that notebook can sync. Notes like receipts for deductible items don't have to be encrypted if they don't contain confidential information.

On notebooks, I mostly like your idea. What I would suggest you  consider long term is closing down a year's tax documents by tagging them all with something like "2016-taxdocuments" and then moving them to a general "Tax documents" notebook and deleting the year specific notebook. I wouldn't do this until I was done using those documents, but this would act to save notebooks which do have a cap in Evernote. 

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6 hours ago, Candid said:

a local notebook so it does not sync to the cloud

Thats a good reason for setting up a notebook.  
Another reason is to have a shared notebook.
I guess one could set up two Tax notebooks; one cloud and one local.
I'm still favouring tags for subject classification

>>encrypt files with information in them that you don't want anyone to have.

This would be my approach,
I like to have by data sync'd to the cloud and my ipad, both for easier access and as part of my backup strategy.
Evernote has a built in feature for text encryption, but I prefer encrypted pdfs.  They are more encompasing and have better mobility.

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Candid....I'm presuming that the reason you advocate for a local notebook for this purpose is to keep sensitive, personal information confidential. The assumption implicit in your post is that this information would not be secured in a synced notebook because it would be also stored in the cloud.

I know security of Evernote data is a serious concern with a lot of differing perspectives on it. Honestly, I wish Evernote would encrypt data at rest, but they do not.  So, for me, the question is how much do I trust Evernote. One thing I've found is that Evernote is massively more valuable to me the more I put in it. And conversely, the more I keep data for which I search in multiple places, the less useful it is. So, I do have sensitive information in Evernote beyond just tax-type of information. But I do not store tax returns and such information there.

For now, I'm ok putting things like 1099s, W2s, 1098s, charitable statements, property tax statements, etc...there. I have enabled 2-step authentication and I hope it's enough. 

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Depending whether you need to print the documents in thier entirety in the future, you can redact your SSN and the like from the documents.  As far as I know redaction completely removes the information.  Somewhat less exposed.

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25 minutes ago, conejo23 said:

The assumption implicit in your post is that this information would not be secured in a synced notebook because it would be also stored in the cloud.

That's a good assumption, IMO.

25 minutes ago, conejo23 said:

For now, I'm ok putting things like 1099s, W2s, 1098s, charitable statements, property tax statements, etc...there.

I think a pretty easy workaround is to scan all of that stuff to a PDF, and then encrypt the PDF BEFORE attaching to Evernote.

After you attach the encrypted PDF to an EN Note, then you may want to add some keywords and/or non-sensitive description to the Note body to make search easier.  Of course, you can make good use of the Note Title and Tags for searching even though the PDF is encrypted.

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I played with encrypting the PDF and figured it out, that can absolutely work but is a bit of a pain to do. But I've no idea how to "redact" sections of a PDF. Let's say a form has our social security number on it and I just want to black that out, and it's in a PDF. Is that something I can do directly in evernote or do I need to figure out how to do it prior to putting the PDF into evernote?

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EN does not have the functionality to redact a PDF. 

You need a program which can edit PDFs.  If you do a search to find such software which will range from free internet based (which seems counter intuitive to me) to Adobe which costs the most.  A middle of the road program will cost $100 or less. 

You can redact the PDF before or after you add it to EN, though adding it to a local notebook would make the most sense.

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11 hours ago, conejo23 said:

I played with encrypting the PDF and figured it out, that can absolutely work but is a bit of a pain to do

Not really if you have the right tools.  There are PDF tools for both Mac and Windows that allow you to simply drag/drop one or more PDFs onto the app or folder, and the PDFs will be encrypted.  From there you can import into Evernote as you normally would.

But there is no question that it takes more effort, and makes it harder to use when you lock things up, whether that is a PDF, your car, your money, your valuables, etc.  For me it is a no-brainer to encrypt any sensitive PDF that I'm going to put anywhere in the Cloud, Evernote or otherwise.

BTW, IMO PDFs should be encrypted with at least 128-bit AES or preferably 256-bit AES.  For more info see:
PDF Password Encryption -- What you need to know 

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1 hour ago, JMichaelTX said:

Not really if you have the right tools.  There are PDF tools for both Mac and Windows that allow you to simply drag/drop one or more PDFs onto the app or folder, and the PDFs will be encrypted.  From there you can import into Evernote as you normally would.

 

So, what would be those tools? I figured out how to do it in Preview on my Mac but it would be cool to have a folder where if I drag anything into it, those files are automatically encrypted and then I can drag out of that folder into Evernote. How do I do that on a Mac?

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one note: I'm (theoretically) familiar with the Mac process of using Disk Utility to created an encrypted disk image that kinda acts like a folder, but that has always seemed like a pain. If that's the solution, I'd rather just do the Preview method of encrypting individual files.

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35 minutes ago, conejo23 said:

I figured out how to do it in Preview on my Mac

Unfortunately, while the Preview app makes it easy to encrypt a PDF, it is not adequate, IMO.  It only provides a 128-bit RC4 encryption and a user's password:

  • User's Password -- aka Document Open Password
  • Owner's Password -- aka Permissions Password

Mac-Preview-PDF-Encryption.png

I use Adobe Acrobat Pro XI to produce a 256-bit AES encryption, and assign BOTH a user's and owner's password.

You can do some research to find a number of PDF tools for the Mac.  I can't recommend any of them other that Adobe Acrobat Pro, which is admittedly expensive.

But here is one PDF tool I found for $27:
A-PDF Password Security for Mac 

You can download a trial version for evaluation.

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thanks for the link to that app, I'll check it out. A question from someone who is not a security expert: what is the practical difference between a PDF you encrypt and one encrypted in Preview? What makes the latter "not adequate"? Is the concern there a real, practical one or more of a theoretical one?

I may very well be naive but here's how I look at it, I guess: first, the odds that anyone other than the government wanting to look at my tax returns while they are in my Evernote account would seem pretty small. I'd guess that my biggest risk of exposure is not being directly targeted by someone, but by having my data exposed along with thousands of others in some kind of wide breach. If that were to happen and the hackers were going through files and found PDFs I had in evernote that were encrypted with the lower level of security, are they going to stop everything and focus on cracking those files or just plow through and see what other low hanging fruit is available?

It seems like it could be similar to home security. Sure, I could invest $20,000 in an elite home security system for my modest home with infrared detection, motion pads outside the house, state of the art everything. Or I could keep my doors locked, keep shrubs away from the windows, lock everything up when I'm gone, have a couple big dogs with access to inside and out who bark their heads off if anyone approaches the house, and a basic security system that costs me a few hundred to install and $50/month to monitor.  Does the former give me more protection? Sure, but do I NEED that level of protection? Probably not. 

Just trying to get a feel for how protected or exposed my Preview-encrypted files would be compared to more robust alternatives.

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13 hours ago, DTLow said:

Information classified up to SECRET     AES 128-bit key / 256-bit key 

- standard met by Mac Preview pdf encryption

That is incorrect.  Mac Preview app provide ONLY 128-bit RC4, which is far inferior to 128-bit AES.

 

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17 hours ago, conejo23 said:

 A question from someone who is not a security expert: what is the practical difference between a PDF you encrypt and one encrypted in Preview? What makes the latter "not adequate"? Is the concern there a real, practical one or more of a theoretical one?

AFAIK, none of us here is a qualified security consultant.  I would not base any of my security decisions solely on what people say here.

Each person needs to do his/her own research based on qualified documents and people.

Having said that, document security is not something I would go cheap on, or use yesterday's technology.  The issue/concern is very real, and the hackers get better every day.    When you can get the best consumer-grade encryption (256-bit AES) for only $27, I'm not sure why anyone would look further.  IMO, this is not a time to be "penny-wise and pound-foolish".

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I just downloaded the trial version of that PDF encryption product, will see how that goes. I like how it lets you create inbox/outbox folders for drag and drop encrypting. Nice. Preference window is horrible. Unfortunately, the interface is just terrible.  I hate that it gives me "low/medium/high" security options without telling me what those actually are. Lame.  But the folder functionality makes it easy to encrypt this stuff, much simpler than using Preview. So I'll likely buy it when the trial period ends. Thanks for the recommendation.

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21 hours ago, JMichaelTX said:

That is incorrect.  Mac Preview app provide ONLY 128-bit RC4, which is far inferior to 128-bit AES.

Thanks for pointing that out.
I have removed the post until I can verify the facts (qualification for "Secret")
To be honest, I worked in the corporate world and  the highest level we had was Confidential.  I was told it was equivalent to gov Secret, but there does seem to be a contradiction.

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On April 8, 2016 at 8:57 PM, JMichaelTX said:

But here is one PDF tool I found for $27:

A-PDF Password Security for Mac 

You can download a trial version for evaluation.

>>I just downloaded the trial version of that PDF encryption product, will see how that goes. I like how it lets you create inbox/outbox folders for drag and drop encrypting. Nice. Preference window is horrible. Unfortunately, the interface is just terrible.  I hate that it gives me "low/medium/high" security options without telling me what those actually are. Lame.  But the folder functionality makes it easy to encrypt this stuff, much simpler than using Preview. So I'll likely buy it when the trial period ends. Thanks for the recommendation.

I agree and will be looking at adding this to my workflow. Thanks for the recommendation.
I also will be using the "Hot Directory" setting and bypass the UI.  I'm not enthused that the original pdf remains in the folder and has to be deleted manually.

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On 04.04.2016 at 02:27, conejo23 said:

So I went to a meetup presentation at the Evernote offices here in Austin in February, heard Stacey Harmon give an excellent talk on going paperless. Really good stuff. The gist of it was "I'm not against using paper, I just don't KEEP paper".   And then, "have a strategy laid out ahead of time for how to deal with every kind of paper that enters your life." Simple, yet profound. I realized I didn't have all of that in place. Best tax consultant near me Virginia.  Anyway, as part of my newfound zeal for going paperless, I want to start digitizing all my tax inputs through the year so I'm not cramming stuff into a file, instead it's all categorized in Evernote. Now, I know some people have elaborate notebook structures and don't use tagging at all, and some have like one or two basic notebooks and use tags and searches to find everything. I guess I'm kinda in the middle, more on the notebook side, I don't make a whole lot of use of tags. But for taxes, I'm thinking it makes sense. Here's my idea, I'd like comment on whether it's sound or should be revised. 

I'm going to make a Notebook Stack called "2016 Financial Documents". In it I'll have a few different notebook, one for "2016 Taxes", another for "2016 Misc Receipts" (into which things would go that are not tax deductible). Then probably another for misc documents, like insurance policies, etc...

For the items I put into the 2016 Taxes notebook, I'm thinking about tagging them based on what kind of item it is. For example, if it's a W2 or a K1 it gets the "income" tag. If it's a charitable donation, I'm thinking the exquisitely creative tag of "charitable donation". Another for "schedule A deduction", "medical expenses", etc...  Then at tax time I can do searches from that notebook by tag and find everything grouped together.

Thoughts?

how did you solve the issue?

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FYI, three year old thread. 

My solution has been to create tags preceded by 1040 for what form related to the document.  I use 1040.1099.Cons where the data appears on multiple forms.  And a 1040.Backup for ancillary stuff.  I also add a tag for the year, preceded by _, like _2019.  And add a tag for the account/organization for the document if applicable.

Some of the tags are 1040.W-2, 1040.Sched.A, 1040.Sched.B.Div, 1040.1099.cons, 1040.Backup, 1040.Sched.D,

Simple search of tag;_2019 tag:1040* will return all tax documents for this year.  Simple search of tag:bankname tag:1040.sched.b.int returns interest statements across all years for bankname, useful for comparison.  Obviously all these notes are in a local notebook.  FWIW.

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12 hours ago, Taxio said:

how did you solve the issue?

It wasn't so much of an issue as best practice.

I'm a tagger, but notebooks also work

My issue with notebooks is that the Evernote restricts us to a single assignment.    
A receipt note may have many categories; receipts, taxes, vendor, budget, ....

My notebook use is for sync'd/local, private/shared, offline, default inbox

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Step one, during the year: Grab everything that smells like taxes, scan it, throw it into EN, and tag it with TAX and YEAR, plus other tags. Everything goes into whatever notebook is appropriate for these documents - extraction is done by tags, not by notebooks.
One little thing for those going paperless: Under German tax legislation, I have to keep originals of all paper documents for 10 years (shorter for plain private use, but I rent some appartements, run a small business etc., so I am regarded as PinkElephant INC by authorities), so they all go into a collection box, that will get the year written on it and will stay archived for 10 years. This is just in case the tax officials want to check something out - if they do not get paper, they can close the audit and estimate my taxation based on assumptions. And I do not like Government assumptions on this ...

Step two, preparation: Search all notes with these tags, and create a copy of them into a new notebook, named TAXYEAR. Make a table of content, write a note that explains what needs to be explained.

Step three, tax declaration: Share this notebook with my tax accountant, to prepare the declaration. When he is done, he will tell me.

Step four: Tag all copies in that notebook used for the declaration with a new tag TAXYEAR, and move them to a plain archive notebook. By this I can replicate what has been in that shared notebook. Yes, it is redundant information. Delete the TAXYEAR notebook, because it is no longer needed.

The original notes stay in their respective notebooks, because I may need them for warranty, as a reference, for calculation of rental cost to be assigned to the tenants etc.

The step with copies in a separate notebook I use because it is very easy to share a complete notebook to somebody. Access to the EN server is routed through an encrypted line, so for me it is safe enough to handle my stuff.

There may be easier methods, but it is pragmatic, works for all involved and is embedded in my general workflow.

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1 hour ago, PinkElephant said:

I have to keep originals of all paper documents for 10 years ...so they all go into a collection box, that will get the year written on it 

It's good practice; I also archive the paperwork - for me it's more cya than regulation
After scanning, all paperwork is thrown into a filing box ordered by date (top to bottom)     
 

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1 hour ago, DTLow said:

It's good practice; I also archive the paperwork - for me it's more cya than regulation
After scanning, all paperwork is thrown into a filing box ordered by date (top to bottom)     

So many documents have electronic only options anymore not sure paper is as important as it once was.  For me it is from scanner to shredder if paper is the delivery medium. 

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In this respect our legislators prove real digital phantasy:

  • If the document is originally issued by electronic means, and signed by the issuer, ONLY the electronic copy is valid.
  • If the document came in paper, ONLY the paper copy is valid.

So the same bank account slip has to be archived in paper, when I went to the bank and printed it there - but I have to file it electronically when I downloaded it from the same banks web site. The electronic stuff is no problem in my workflow, because when I archive it in EN, the signature continues intact.

Regarding paperless workflows, of course one can create a workflow that meets requirements. You need an archive software that is certified against tampering, plus you have to introduce a workflow with all the bells and whistles about how to handle paper documents that enter your place by mail. Then you have to have this workflow audited and certified as well. For a company this can be done, for an individual it is the box with the paper.

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14 minutes ago, PinkElephant said:

...  for an individual it is the box with the paper.

or a local notebook in EN and print the doc should anyone ever ask...   ;).

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Old paper looks and smells - old.

Because it does not need to be filed in any way, just collected, it is not really work to do so. After scanning, the question is „tax relevant ?“. Then it goes into the box, else it goes into my shredder (unless it is one of the rare docs I keep in paper as well).

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