Spring is upon us! The beautiful weather and budding trees are a sure sign of it. This is the time of year many people undertake the annual “Spring Cleaning” of their homes. However, not all spring-cleaning requires a broom and dustpan. Take a look at the table below when organizing your financial documents. It should help you identify what to keep and what to toss.
What to Keep:
Insurance Policies
Policies and declaration pages
Keep Current
Legal Documents
Wills, Powers of Attorney, Trusts
Forever, if current
Marriage and Birth Certificates
Forever
Titles to Real Estate and Vehicles
Until sold
Military Records, Naturalization & Adoption Papers, etc.
Forever
Tax Documents
Tax Returns and supporting documentation
At least 7 years
(The IRS can initiate an audit within 3 years, pursue under-reported income for up to 6 years, and investigate false or fraudulent returns indefinitely.)
Account Statements
Year-end Statements for Investment and Banking Accounts
At least 1 year
(Keep indefinitely if related to taxes, business expenses, home improvements, or mortgage payments.)
Receipts or Bills for Large Purchases
Home improvement projects
Until sold
Insurable Items
As long as owned
What to Toss:
Receipts
As long as you are not using them for tax deductions or expense reimbursements, toss them once you’ve verified the charges.
Utility Bills
As long as they are accurate and they have been paid, toss them.
Monthly and Quarterly Account Statements
If quarterly statements reflect monthly transactions, get rid of monthly statements. Similarly, if year-end statements list all transactions for the year, toss quarterly statements.
Old Investment Prospectuses and Brochures
Toss prospectuses and brochures that are outdated or for investments you have sold.
Cleaning Up Your Financial Records
December 11, 2008
Spring is upon us! The beautiful weather and budding trees are a sure sign of it. This is the time of year many people undertake the annual “Spring Cleaning” of their homes. However, not all spring-cleaning requires a broom and dustpan. Take a look at the table below when organizing your financial documents. It should help you identify what to keep and what to toss.
What to Keep:
Insurance Policies
Policies and declaration pages
Keep Current
Legal Documents
Wills, Powers of Attorney, Trusts
Forever, if current
Marriage and Birth Certificates
Forever
Titles to Real Estate and Vehicles
Until sold
Military Records, Naturalization & Adoption Papers, etc.
Forever
Tax Documents
Tax Returns and supporting documentation
At least 7 years
(The IRS can initiate an audit within 3 years, pursue under-reported income for up to 6 years, and investigate false or fraudulent returns indefinitely.)
Account Statements
Year-end Statements for Investment and Banking Accounts
At least 1 year
(Keep indefinitely if related to taxes, business expenses, home improvements, or mortgage payments.)
Receipts or Bills for Large Purchases
Home improvement projects
Until sold
Insurable Items
As long as owned
What to Toss:
Receipts
As long as you are not using them for tax deductions or expense reimbursements, toss them once you’ve verified the charges.
Utility Bills
As long as they are accurate and they have been paid, toss them.
Monthly and Quarterly Account Statements
If quarterly statements reflect monthly transactions, get rid of monthly statements. Similarly, if year-end statements list all transactions for the year, toss quarterly statements.
Old Investment Prospectuses and Brochures
Toss prospectuses and brochures that are outdated or for investments you have sold.