Tax season might be old hat by now, but there are some things about taxes that continue to perplex taxpayers, especially as digital nomads. Specifically, how to organize your tax documents?

Your aunt says to throw it all away after 2 years.

Your banker friend says to save everything for 7 years.

Your mom says to keep it all forever!

Who do you listen to? Who’s actually right?

Are there reasons you should save tax documents forever? How can you actually organize your tax documents?

Use this handy guide to help you determine which tax-related documents to save and which to pitch.

Organize Your Tax Documents

Keep everything electronically

Let’s face it. Digital nomads live small with little space to store extra papers and other stuff.

What does that mean for you?

organize your tax documents Digital Nomad Tax Queen

If you don’t have room to store tax returns, scan them and keep them electronically. I suggest keeping them securely on cloud storage or possibly a backup hard drive kept in a safe place.

Think fire here. If your backup drive is in your RV and the whole thing burns down. You just lost your computer (original storage) AND your backup.

There are so many options nowadays for cloud storage or online backups, so don’t put this off. Get it backed up now.

Save your returns

Many financial experts recommend never throwing away tax returns.

Why, you ask?

They might come in handy in the future when you need to reflect back to determine the cost basis of prior investment figures, if you wish to apply for loans, or if you want to file for disability insurance.

If you keep things electronically, it’s not a big deal to keep years of tax returns.

Keep stock and mutual fund confirmations

This would be your 1099-B statements from your fiduciary like Vanguard, Fidelity, Charles Schwab, etc., and even those cryptocurrency trades, buys, or sales.

Because you’ll likely someday sell your stock market or crypto purchases, you’ll need the original information about those items, such as when you bought them, how much you paid, and how many shares you bought.

organize your tax documents stack of papers digital nomad

This is true even if you plan to pass these stock purchases to your decedents. Knowing all that data is so important when it comes to tax time.

Trust me. It’s a pain to find it out later so it’s best to keep those forms around for later. Even if later is 20 or 30 years down the road.

As long as you have the stock, you’ll need those confirmations. So save – don’t pitch.

Toss monthly stubs or statements at year’s end

If you get year-end reports, just keep those vs. each month. That will save some storage for you.

This means you can also pitch salary paystubs after the year’s end. If you saved paystubs all year, it’s okay to get rid of them after you’re sure your W-2 is accurate. You could also simply keep the final pay stub of the year.

The only exception to keeping monthly statements would be related to a home office. If you take a home office deduction, keep all your household bills to prove the home office expense.

Save credit card bills

Although some financial experts recommend pitching them, many reasons to save them exist. For example, these days, credit card companies often insure anything you’ve purchased with the cards.

Think of a computer or other expensive items that might break.

Check with your credit card to see if they offer this coverage and if it’s worth savings receipts and statements.

There are always exceptions.

With digital copies, it’s easier than ever to keep good records and not give the excuse there’s no storage space.

One example of an important instance:

In 2010, the government offered the Longtime Home Buyers’ Tax Credit to home purchasers who could furnish proof they’d resided in their previous home for 5 of the prior 8 years.

Sound easy? It wasn’t, as many applied for and didn’t receive this credit. Why? Many homebuyers were unable to prove they’d resided in their home for 5 years to the satisfaction of the Internal Revenue Service (IRS).

One couple that did receive the credit got it because they had saved their monthly utility bills for the home and sent copies with their application for the tax credit. So, saving their utility bills ultimately helped them receive a $6,000 credit from the IRS.

The other examples I like to use: the solar tax credit or electronic vehicle credit. Keep all the documentation around this so it’s not a question later. It’s not that hard to keep electronic copies and it can save your from losing out on this credit.

If you take this information into account, you won’t get caught without a receipt you need or using up precious space to store papers you don’t require.

Get organized today! The time is now to organize your tax documents.

RV Tax Queen

I’m a numbers person—but don’t let that scare you. I’ve been an enrolled agent (EA) since 2014 and a nomadic business owner since 2016. Because I’m a nomad myself, I know exactly how stressful life on the road can be.

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This website is for general information only and is not intended to substitute for obtaining legal, accounting or financial advice. It is not rendering legal, accounting or other professional advice. Presentation of the information on this website is not intended to create a client relationship. For specific tax assistance please consult a tax professional on an individual basis.

While I make every effort to furnish accurate and updated information, I do not guarantee that any information contained in this website is accurate, complete, reliable, current or error-free. I assume no liability or responsibility for any errors or omissions in its content.


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