home tips speaking resources about contact

Friday, October 8, 2010

What financial documents should I keep?

Seems that all of us are concerned about what documents we need to keep and what we can shred.  Our cautiousness is good ... to a point.  Our fear is leading some of us to over-save paper and is creating a mess in our homes, and an underlying anxiety from the clutter.

I've done a bit of research to figure out some basic guidelines.  Please, please, please check with your accountant regarding any specific information or questions you have.  These are just some basic guidelines - not professional advice for your situation.  Here's a link to the IRS website with more detailed information.  Also, this list doesn't apply to self-employed people or businesses.  It's just some practical advice for general paper management.

This is why everyone needs a filing system of some kind. Read my post on filing for tips on setting one up.  Another option is to scan older documents if still want to reference them, then keep them electronically, with a back-up copy somewhere.  Check out www.Carbonite.com for the back-up I use.   

Tax Returns (and supporting documents)
Keep for at least seven years.  

IRA Contributions
Keep until you withdraw the money entirely.  You need to show if you paid taxes on this when it's time to withdraw.

Receipts for purchases
It is wise to save receipts for any purchase where:
1) You may need it for the warranty or service agreement.  You might consider storing these receipts in your files under general categories like kitchen, computers, televisions, hand-held electronics and so on. 

2) You want it for insurance should you ever have a loss due to theft or damage.  A really organized person might keep a record of purchases in a ledger book, and then store that book a safety deposit, updating it every few month.  Or, keep an electronic record, with a hard drive backup like Carbonite.com. 

Investments/Banking/Retirement Statements
Keep the quarterly statements until you receive the year-end statement.  Keep year-end statements with tax documents.

Paycheck Stubs
Keep for a year until you get your year-end W-2.  If everything is correct, shred the paycheck stubs

Medical Records
Save for seven years with tax documents.  However, it seems I'm occasionally wanting to remember when something happened and have had to go back through past year's documents.  But what I should have done years ago is keep track of illnesses, surgeries and procedures in a record-keeping book of some kind.  If this idea appeals to you, look for record-keeping journals, or just buy a few smaller spiral notebooks.

Home Records
Keep all purchase and sale documents.  Keep all home improvement expenses. Keep expenses related to selling your house.   When you sell your house, you'll want these documents for tax purposes.

Automobile Expenses
Keep all purchase documents and repair receipts in case you sell the car. You'll want to pass these along to the new owner.

Permanent Storage
There are always documents you want to store in a secure fire-proof place.  This list can change based on your individual situation.  But experts generally agree on the following:

  • Birth certificates
  • Will
  • Marriage certificate
  • Adoption certificate
  • Passports
  • Social security card
This is a lot of information for a Friday. If you need a weekend project, here it is! 

What have I missed?  I'd love to hear your insight regarding this issue.  Any advice? Hard-learned lesson?  Please post a comment.

Grace & Peace,


No comments:

Post a Comment