Printing is slowly disappearing from the technological scene. With smartphones, syncing services (like Dropbox and SugarSync), tablets, laptops, WiFi, and 3G/4G, gadgets can easily display files and information for you. The advantages are clear: less stuff to lug around and keep up with, it's searchable and editable, and it is available everywhere. Hence the move to plain text, which is easily transferable between various applications and platforms.
There are downsides, however, especially the problems of data corruption, loss, and rot, and privacy. Having a good backup strategy deals with data loss (but not corruption and rot). Privacy is a real problem, however. Anything in the cloud can be hacked and stolen, so putting your 1040 on dropbox is not a good idea. You should assume that anything on the internet can be compromised, unless it is strongly encrypted.
David Sparks' helpful iPad book, Paperless, advocates a strategy of going paperless. David's preferred method is using PDFs, Dropbox, and Hazel to store and sort your data. There is a lot to like about this strategy, and it's one I've tried. But I find that I stumble with Hazel, though, and rules that I thought were working correctly come back to haunt me. The other problem with this particular approach is privacy. For sensitive documents you would want to keep them stored locally (and not in the cloud, except for online backups) and then encrypt them somehow, either by creating a sparse disk image with a password, or by using the Mac OS's FileVault, which encrypts your entire disk on the fly.
I run into problems with Hazel and an encrypted disk image. Sensitive documents get stuck waiting for me to open the disk image so they can be appropriately filed. Sometimes they get stuck in a loop. Plus, it takes away from the automation fluidity, since Hazel must wait for you to open the disk image to file it, and then you must eject it. This creates friction which ought to be more effortless. Sometimes it's simply easier to file the real papers in a real system, rather than scan and deal with this sort of system.
I continue to find myself coming back to Evernote. Evernote is simple to use and very powerful. You can tag, file, and search. Your data is available online, on a Mac, Windows, iOS, and other mobile platforms. You can throw anything into it, from MP3s to DOCs to JPGs. It is a huge database that can be sorted, queried, and re-sorted.
Evernote does leave you with a potential legacy application; it could disappear in a few years, with your data and metadata rendered useless. You can export your data from Evernote quite easily, but all the metadata that had been built up would be lost. But one factor that is a big nod to products like Evernote is its large install base. There is safety in numbers, and if Evernote were to fold in several years there would doubtless be products to aid its many subscribers in migrating to another product. The same principle applies to PDFs and even DOCs: they are so prevalent as a file type that data migration is going to be very likely in the future, since so many people would be trapped in the same boat. It may not be cheap, but someone somewhere would provide a way to migrate those files and databases. So I feel fairly comfortable storing my data in Evernote. The future is always uncertain, but popular systems like Evernote lessen that uncertainty.
What to do about data privacy? You can encrypt parts of notes within Evernote, but not entire notes or folders. Even better, Evernote does allow for local notebooks, so you can have some folders only on your local drive and backup systems, and not in the cloud. So I have created local only notebooks for my financial and personal records, which I don't need to access everywhere anyway. I have also turned on FileVault so that my drive is encrypted. Now I don't have to deal with sparse images anymore, I don't run into Hazel doing something I didn't intend, and I have my files in a highly searchable and integrated system. Evernote, Evernote's local notebooks, and FileVault provide an effective and inexpensive paperless system.
Whatever system you choose, remember the issues of backup, cloud storage and availability across various platforms, privacy, and data rot. Good luck.