Monday, April 6, 2009

Financial records: keep or toss?

It’s tempting to keep every piece of paper you ever receive, every seemingly important bit of financial information. Luckily for the state of your filing cabinets, that’s simply not the case. You can – and should – regularly go through your paperwork and toss out whatever you can. (Or more accurately, shred. More on that in my next post.) Of course, it’s ideal to pay bills and receive statements electronically; I encourage you you to do as much of this as you can. For everything else, here is a list of what to keep and for how long. Now you just need to take the initiative to do this on a regular basis, right?

Toss every month
  • ATM and bank deposit slips, after you’ve recorded the amounts in your check register and checked them against your monthly bank statement
  • Credit card receipts, after you’ve checked to make sure the item appears correctly on your monthly statement
  • Sales receipts for minor purchases, after you’ve satisfactorily used the item and if it has no warranty

    Toss after one year
  • Monthly bank and credit card statement (if you don’t itemize deductions)
  • Monthly or quarterly brokerage and mutual fund statements, after you’ve reconciled them with your year-end summary
  • Monthly mortgage statements, as long as your year-end statement clearly shows the total amount you’ve paid in interest and property taxes over the course of the year
  • Phone and utility bills (as long as you don’t have a home office, use your phone for business calls, or anticipate any need to prove long-term residency)
  • Paycheck stubs, after you’ve reconciled them with your annual W-2 or 1099 forms

    Retain for Seven Years
  • W-2 and 1099 forms
  • Year-end statements from credit card companies
  • Phone and utility bills (only if you deduct any portion for business expenses, have more than one home or have moved within the past few years)
  • Cancelled checks and receipts/statements for annual mortgage interest and property taxes, deductible business expenses, child care bills, out-of-pocket medical costs, or any other tax-deductible expense
  • Records of expenses incurred in selling and buying a house, condo, etc., such as legal fees and your real estate agent's commission

    Keep Indefinitely
  • Annual tax returns
  • Year-end summaries from financial services companies
  • Confirmation slips that show beneficiary designations and the purchase price of stocks, mutual funds, and any other investments you hold; hang onto these records indefinitely because some day you or your heirs will have to know exactly how much you paid to determine the profit on your investment for tax purposes
  • Home improvement records
  • Receipts for major purchases such as jewelry, rugs, appliances, antiques, cars, collectibles, furniture, computers, etc. – should be kept in an insurance file for proof of their value in the event of loss or damage
  • Records detailing medical procedures and results
  • College transcript
  • Automobile records (title, registration, repairs) – for as long as you own the vehicle

    Examples of records needed for taxes (keep for seven years)
  • Bank statements and cancelled checks
  • Certificates of Deposit
  • Contracts
  • Charitable contributions
  • Credit statements
  • Income tax returns
  • Lease and loan agreements
  • Loan payment books
  • Pension plan records
  • Pay stubs

    Keep receipts for as long as you own
  • Appliances
  • Art, antiques, collectibles
  • Clothing
  • Furniture
  • Home improvements
  • Home repairs
  • Major purchases

    Keep in a fire-proof safe or safe deposit box
  • Birth certificate
  • Adoption certificate
  • Death certificate
  • Marriage license
  • Divorce decree, custody agreement, property agreement
  • Citizenship papers
  • Estate planning documents
  • Copyrights and patents
  • Insurance company names and policy numbers
  • Vaccination records
  • Deeds and titles to property and vehicles
  • Military service record
  • Household inventory, photos, serial numbers
  • Social security numbers
  • Passport
  • Bank and credit card numbers and telephone numbers of issuers
  • Contracts and other legal papers

    Diane Harris, Real Simple, April 2000
    Marquette National Bank and Catherine Williams, President of Consumer Credit Counseling Services of Greater Chicago posted on, September 2005
    University of Wisconsin Cooperative Extension, 1999
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