List of Financial Documents to Keep (and for How Long)

The time after Christmas is a popular time to clean house. But unfortunately gift wrapping paper isn’t the only kind of paper you need to attend to. You should also consider throwing away certain financial papers.

The year is nearly over. And although 2015 is nearly here, our society isn’t yet paperless. Chances are you still have a filing cabinet – or two or two – brimming with old financial documents. You would throw them away but you keep them… “just in case.” This article covers what papers to keep, what to throw away, and when do to the latter. No guessing.

All of these tips apply whether you keep your files in hard-copy form or e-form. I discourage anyone from keeping hard copies of anything if an electronic version is available. Keeping your documents all in one location is akin to keeping the planes close together at Pearl Harbor…

I try to keep everything filed electronically to a cloud like Google Drive. Electronic forms hold just as much weight as paper forms in court…

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Documents to Keep…

– Will’s (Have a backup copy either kept with a friend, online where the document was created, and/or with an attorney. When you die, those you leave behind should not have to guess where to find your will.)

—Marriage licenses

—Prenuptial agreements

—Alimony and child-custody agreements

– –Birth and death certificates

—Adoption papers

—Military records

—Citizenship papers

—Divorce papers

—Passports

—Power of attorney for your healthcare

—Copies of your IRA, 401(k), and other retirement account plans (Beneficiaries listed here override the will if there is a conflict.)

 

Long-Term Files (Keep for 7 Years)

—Income tax returns (state and federal) (Keep supporting documents as well. These include receipts for business expenses, cancelled checks, etc. The IRS once questioned a past tax return of mine. I was able to pull out my 2-year-old tax return and prove I had no made an error. Tax returns are also handy for reference when doing the next year’s taxes. You can also see information about past earnings and assets. If you’ve thrown past tax returns away.

You can always obtain new copies from the IRS:

Send form 4506, “Request for Copy or Transcript of Tax Form” to the IRS at P.O. Box 9941, Photocopy Unit, Stop 6734, Ogden, UT 84409. The cost is $50. Up from about $20 10 years ago. So get them now before the price hikes again. Click this link for more information.

—Wage= records and annual payroll check stubs

—Savings account records

—Monthly statement information for any type of bank or brokerage account

—Cancelled checks or bank statements

—Guarentees/warranties

 

Short-Term Files (Keep for 3 Years)

—Utility and telephone bills (Tenants or new owners may want to review recent bills to determine what they are paying.)

—Credit card statements if they list tax-deductible expenses or charitable gifts

—ATM receipts/deposit slips (But as soon as they appear on the bank statement, shred.)

—Medical bills (In case there is a dispute over a reimbursement.)

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Shred your unneeded hard-copy documents – even pre-approved credit card coffers. A paper shredder can be had for around $40. This will help you from falling victim to identity theft – one of the fastest growing crimes in the US.

 

A Yearly Review

Each year, throw away the unnecessary documents. It won’t take very long.

Are you going to start sorting through your old documents? I did a massive cleanup of my documents a few years ago. It’s not too diffucult. I did it the day I got my wisdom teeth pulled.

 

 

Will

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