| Many people know that keeping their records under control can save time, energy and headaches, but don't know where to begin. To turn good intentions into great record keeping, consider observing the following expiration dates for your documents. And remember - protect your financial information by shredding what you decide to discard.
Bank Records
If you receive a hard copy of your statements and cancelled checks, hang on to cancelled checks for one year, and then consider discarding all those you won't need for tax, warranty, or insurance purposes. Be sure to shred those that have no long-term importance. If you receive your statements electronically, be sure to keep a recent paper copy filed in your important papers so that if something happens to you whoever is in charge of taking care of your affairs is aware of the existence of the account. You can also save these statements to disk for easy storage and you should keep the disk in a safe and secure place.
Credit card, debit card, and ATM receipts
Save these receipts to check the transactions against your monthly statements. If any purchases have warranties, attach the receipt to the warranty information in case you need proof of purchase. Save receipts for gift items (or anything else you may need to return to the store). Save receipts for items to prove value for your insurance or taxes.
Tax documentation
Supporting tax documentation, such as receipts, W-2s, 1099s, canceled checks, and credit card statements can generally be thrown out three years after the return's due date. In some special circumstances, however, you may need to hold on to tax documentation longer.* (The IRS has six years, for example, to challenge your return if you are suspected of under reporting your income by 25 percent or more.) Keep copies of your actual tax returns permanently. * Consult your tax adviser for more information.
House-related documents
Keep canceled checks and invoices for any permanent home improvements until you sell your house; you may be able to reduce your taxable capital gains if any. Then, save papers that support the profit you realize on the house sale for three years after the tax year in which the house is sold, especially if you defer tax liability by rolling over any gain into another home.
Savings and Investment records
Keep records of the purchase and sale of mutual funds and stocks until you've reported the transactions to the IRS, and then keep the records with your other tax-related documents. The IRS has stringent rules on reporting capital gains and losses.* You may also want to keep the most recent cumulative (year-end) reports for each security. Save quarterly reports from all retirement plans until you get an annual summary. Keep all annual summaries until you close the account. *Consult your tax adviser for more information.
Automobile papers
Finally, store car maintenance records until you sell the car, at which time you should give them to the new owner. Keep the purchase order and title for as long as you own the vehicle.
Keep these documents indefinitely
Some documents should be kept permanently. Get a safe deposit boxes at your bank, or you can acquire a fireproof home safe to help ensure their safety.
• birth certificates
• retirement-plan documents
• college transcripts
• receipts for major purchases
• credit card agreements
• Social Security cards
• diplomas
• stock purchase agreements
• tax returns
• divorce and property agreements
• home inventory
• warranties (until they expire)
• insurance policies
• work performance reviews
• marriage certificate
• loan agreements performance
• year-end pay stubs and bonus statements
• passport (current)
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