One of the biggest issues that causes some of us to hold on to paper is simply not knowing what we need to keep, especially when it comes to financial documents. I will provide you with a couple of points of reference here, but I am not an accountant and you should consult one to see how this information fits your circumstances.
Bankrate offers a very easy to understand table regarding what financial records to keep and how long to keep them. Here is a summary of their recommendations:
- Taxes – Keep all tax related information for seven years.
- IRA Contributions – Keep permanently to prove you paid taxes on the money when it comes time to withdraw.
- Retirement/Savings Plan – From one year to permanently. Keep annual statements until you retire or close account.
- Bank Records – Save one year to permanently.
- Brokerage Statements – Save until you sell the securities.
- Bills – Save for one year or permanently.
- Credit Card Receipts and Statements – Save for 45 days up to seven years.
- Pay Stubs – Save for one year until you match up with end of year W-2.
- House Records – For six years after you sell your house.
Generally, when it comes to bills, receipts, credit cards and bank statements you would keep these for up to a year unless they are expenses you deduct on your taxes and then you would keep them for seven years. For example, if you own a business you would hold on to everything for seven years. If you have a business in your home and elect to deduct a portion of your utilities for business use you would save all of these personal bills for business records.
Insurance policies are not on the list but when your policy is updated or renewed, you can toss the old one and replace it with the new one.
When keeping up with the paper go digital in as many ways as you can. With each bank, investment, and credit card statement you get in the mail check online to see if they have a paperless option and get your statements emailed to you instead of snail mail. More and more utility companies are offering this option as well and a majority are now allowing online payments.
Personally I scan/download everything I can. I hold on to the digital version for 7 years. My rule of thumb is that if it is a current document that has an original signature I keep it in paper form. Everything else gets scanned.
I hope this guide gives you a better understanding of what you may need to keep for financial records and furthers you on your way to becoming Paper Less. I am open for discussion on any of these topics but remember I am not an accountant so you may want to check with one, I can only share my personal experiences and recommendations.
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Hi,
One way to have all your mail scanned is to use a paperless mail service. I download all my mail and save it electronically without it coming to my house in the first place. More here: http://www.thedigitalguidebook.com
Cheers,
Julia Evans
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