In addition to owning a home, owning a car is often a big purchase for us. Keep the title deeds, registration, proof of insurance, and warranty and maintenance records for your vehicles for the life of the vehicle or until it is sold to someone else. Cleaning your home of piles of unnecessary waste paper is a wonderful feeling, but don`t throw it away with your weekly garbage collection. Most of these documents contain personal information that you do not wish to disclose. When your monthly statement arrives, you should compare it to any physical receipts or bank records that record your purchases. After that, feel free to send them to the shredder unless you used your credit card to buy something you want to claim as a tax deduction. In this case, place receipts and statements with other tax items in the seven-year storage folder. In addition, this article focuses on documentaries that are usually found in person at home and that are not business items. Therefore, always check with your tax advisor to find out which business documents you should keep for tax purposes and for how long. But pay close attention to this part: when it comes to a statement that shows your mortgage balance is paid off in full, you want to keep that documentation forever.
If you have investment and brokerage accounts, I suggest you talk to your accountant to confirm that you are keeping all the correct documents. Set up common folders for different types of documents (e.g. household, taxes, car, birth certificates, etc.) You don`t need to be too specific when storing documents, as electronic filing systems are searchable. You will need to keep them until you sell the securities they capture to prove whether you are incurring capital gains or losses on your tax return. If you hold stocks or bonds for many years, you must keep the statements. The exception is if the base cost and time of purchase are indicated in the statements. In this case, you only need to keep the year-end statements to support your tax return each year. “I had all my tax records, including receipts from 1994. But I recently cleaned up all receipts up to 2012,” says silver expert Clark Howard. “However, I kept all the returns even from 1994.
So I shredded 18 years of supporting documents, but I still have the tax returns. Managing all the important paperwork for a household is confusing enough, but things can get even more complicated for family caregivers who also have financial and medical authority (POA) and help monitor the records of their aging loved ones. To help caregivers reduce their paperwork and create a simple filing system, I have provided general rules for the most common documents below. However, be careful when getting rid of original documents. Don`t throw anything away unless you`re sure you can get another physical or electronic copy of a file from the bank, insurance company, doctor, your employer, etc. If you made an after-tax contribution to an Individual Retirement Account (IRA), you must keep your records of those contributions indefinitely. Otherwise, you will not be able to prove that you have already paid taxes on this money when making a withdrawal. Without a thorough record, you risk paying unnecessary taxes on distributions that should be tax-free. The amount of records and documents you should keep is actually more limited than you think. Keep all insurance policies indefinitely, such as your car, home, umbrella policies, and things like title insurance. They can be moved to longer storage after several years or scanned for digital storage, so they don`t take up much space in your workbook if you want to.
For your most important documents, a standard workbook may not be enough. Using a home safe may be a better option. Look for a fireproof and waterproof safe for maximum protection. A home safe doesn`t need to be elaborate or expensive, like something you`ve probably seen in movies (no wall-mounted safes hidden behind artwork). A simple locker that you can grab and walk is perfect for storing documents in case of fire or flood. When it comes to car loan payment stubs, you should keep them until the car is paid off. Similarly, when it comes to titles, you must keep this document in a safe place until you sell the vehicle. The general consensus is to keep your personal statements for 7 years, keep 7 records, one for each year, and then destroy the oldest of those statements once you add the New Year`s declaration to the file. However, there are cases where you may need to resort to even older returns, such as if you own a home, have a non-deductible IRA contribution, or have rental or commercial properties that you amortize over several years. Keep all medical bills and receipts such as cancelled checks or credit card statements until you are sure that the bill has been paid in full by you and/or your insurance company. If you deduct unreimbursed medical expenses on your tax return, keep all receipts described above.
Remember to keep all health-related bills, including dental care, vision, hearing aids, and over-the-counter medications, to name a few. This article contains general rules, but especially when it comes to tax documents, you should always consult your tax advisor about your unique situation. The IRS suggests keeping the W-2s, 1099s and related documents for three to seven years. However, depending on your individual tax situation, it may be advisable to keep them longer. Your tax returns are important documents that you should keep as part of your financial history. You should keep a permanent electronic or printed copy of each year`s tax return and any payments you make to the government. Also, it`s a good idea to keep records of important financial events such as legal deposits or inheritances. You can easily access your paperless statements and documents and keep them securely online. Bank of America customers can easily manage paperless statements and documents through mobile and online banking. It is best to keep all policy documents together, including proof of payment as well as insurance terms, and all drivers in one place.
Please also note that some invoices are treated as receipts and used for tax documentation, and these must be retained for the long term, as explained in the Tax Receipt section above. No one wants paper clutter, but you also want to feel comfortable with the papers you get rid of instead of worrying about needing them later. To help you, I researched how long you should keep documents of all kinds, and then provided this printable home document retention schedule that you can refer to if necessary. Piles of paper are painful, and managing a home filing system can be a burden. However, you need to keep some documents because you never know when you will need them. As your financial life becomes more complicated, it`s hard to know how long you`ll keep documents and when it`s safe to dispose of them. Some things you have to hold on to all your life and others only for a few months. You probably already know that important documents such as tax returns, bank statements, and payslips require special attention, but for how long and in what format? And what is the best way to protect all this personal data? We`ve put together seven tips in two categories: how long to keep documents before shredding them, and how to properly store sensitive information. How long do you need to keep your taxes, receipts, bank statements and other important documents? Each type of document is different, so keep all your records long enough before you start the shredder, even if you think you`re done with them. Keep in mind that these guidelines are all focused on meeting federal tax obligations.
