Post by Honeylioness on Aug 10, 2010 9:01:27 GMT -5
An article sent to me by my bank with guidelines about what documents you should keep and for how long they should be retained
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Tired of piles of financial files? - Know what you should keep.
They say America is quickly moving toward a paperless society. That’s a little hard to believe when we look at our piles of files or shoe boxes stuffed with old financial records. But as tempted as you might be to shred those documents, line your bird cage with them, or even burn them at your next campfire, it’s important to understand the types of documents that should be saved and how long you will need them.
Permanent records.
There are several documents that you should keep forever. Birth certificates, marriage licenses, social security numbers and passport documentation are a few that should be kept in a safe place indefinitely. You may also want to include medical records, diplomas, and church records as part of your permanent files. These are documents that you may have to refer to from time to time to show as proof of your identity or documentation of life events.
Record keeping for tax purposes.
Although experts have different opinions regarding how long to hang on to old tax returns and supporting documents, you are the one best suited to decide how long you need to keep these records. The goal is to save yourself any extra aggravation should the IRS decide to audit your tax records. W-2 forms, legal documents and tax returns should be kept in a safe place for a minimum of seven years. You should maintain home improvement documents indefinitely as you will need them when you sell your home.
Records for annual review.
There are many financial records that you can discard once a year, including pay-stubs, bank statements, and canceled checks from closed accounts. All of these can be reviewed and tossed when reconciled against your annual statements.
Loans and other financial records.
The basic rule of thumb for car loan records, account statements, repair records and receipts for parts is to keep the records until the loan is paid off, the account is closed and the car or appliances are no longer in your possession. Keep the paperwork for anything that you are still actively using or paying off.
Some records can be purged every month.
Utility bill receipts, charge slips, and ATM receipts can generally be purged once a month. An easy way to achieve this is to sort your papers into three files. Use one file for active monthly bills and one for active monthly receipts. Once you have paid a bill or reconciled a receipt with your bank records, put it into a file marked inactive monthly. At month’s end, you can discard or shred everything in your inactive file.
Staying organized will help eliminate mounting paperwork.
Efficient record keeping is truly a matter of being as organized as you can be. Knowing what you need to keep and for how long will be your best defense against being overrun by paper.
You may also want to consider receiving your statements electronically. This will allow you to store your documents on your computer or DVD for easier retrieval.
***********************************************
Tired of piles of financial files? - Know what you should keep.
They say America is quickly moving toward a paperless society. That’s a little hard to believe when we look at our piles of files or shoe boxes stuffed with old financial records. But as tempted as you might be to shred those documents, line your bird cage with them, or even burn them at your next campfire, it’s important to understand the types of documents that should be saved and how long you will need them.
Permanent records.
There are several documents that you should keep forever. Birth certificates, marriage licenses, social security numbers and passport documentation are a few that should be kept in a safe place indefinitely. You may also want to include medical records, diplomas, and church records as part of your permanent files. These are documents that you may have to refer to from time to time to show as proof of your identity or documentation of life events.
Record keeping for tax purposes.
Although experts have different opinions regarding how long to hang on to old tax returns and supporting documents, you are the one best suited to decide how long you need to keep these records. The goal is to save yourself any extra aggravation should the IRS decide to audit your tax records. W-2 forms, legal documents and tax returns should be kept in a safe place for a minimum of seven years. You should maintain home improvement documents indefinitely as you will need them when you sell your home.
Records for annual review.
There are many financial records that you can discard once a year, including pay-stubs, bank statements, and canceled checks from closed accounts. All of these can be reviewed and tossed when reconciled against your annual statements.
Loans and other financial records.
The basic rule of thumb for car loan records, account statements, repair records and receipts for parts is to keep the records until the loan is paid off, the account is closed and the car or appliances are no longer in your possession. Keep the paperwork for anything that you are still actively using or paying off.
Some records can be purged every month.
Utility bill receipts, charge slips, and ATM receipts can generally be purged once a month. An easy way to achieve this is to sort your papers into three files. Use one file for active monthly bills and one for active monthly receipts. Once you have paid a bill or reconciled a receipt with your bank records, put it into a file marked inactive monthly. At month’s end, you can discard or shred everything in your inactive file.
Staying organized will help eliminate mounting paperwork.
Efficient record keeping is truly a matter of being as organized as you can be. Knowing what you need to keep and for how long will be your best defense against being overrun by paper.
You may also want to consider receiving your statements electronically. This will allow you to store your documents on your computer or DVD for easier retrieval.