Important Documents

How Long Do We Have to Save Important Documents?

I was reading a great article put out by Consumer Reports on how long and why certain documents need to be kept and thought it would be beneficial to court reporters, attorneys, all legal professionals.  It is suggested that you categorize your documents in four ways:  Papers you need to keep for a calendar year or less; papers you can destroy when you no longer own the item; tax records; papers you need indefinitely.

Category 1 – Papers to Keep for the current calendar year (or less):

1.  ATM, credit card, and bank deposit receipts – reconcile with monthly statement and then shred
2.  Keep insurance policies and investment statements until new ones arrive

Category 2 – Papers to keep for a year or more:

1.  Keep loan documents until the loan is paid off
2.  Hold onto vehicle titles until the vehicle is sold
3.  For stocks/bonds, keep investment purchase confirmation until you sell the investment unless that info appears on your statement (in order to establish your cost basis and holding period).
4.  Receipts for home improvement (help offset capital gain taxes when the property is sold)

Category 3 – Taxes:

1.  Keep records seven years.  (If you fail to report more than 25 percent of your gross income on your taxes, the IRS has six years to collect from you.)

Category 4 – Papers to keep indefinitely

1.  Military discharge papers
2.  Birth certificate
3.  Estate planning documents
4.  Life insurance policies
5.  Social security card
6.  Marriage certificate
7.  Inventory of your bank deposit box

Michelle Crouch, Personal Financial Writer states, “The IRS considers electronic documents as good as paper. Just make sure you encrypt the files and store backup copies on a USB flash drive, a CD, a DVD, a portable hard drive or with a web-based storage service.

Tanza Loudenback, Business Insider writes, “Anything with an original signature or a raised seal needs to be kept in its original condition:

  • Birth certificates
  • Citizenship papers
  • Custody agreement
  • Deeds and titles
  • Divorce certificate
  • Loan/mortgage paperwork
  • Major debt repayment records
  • Marriage license
  • Military records
  • Passport
  • Powers of attorney
  • Stock certificates
  • Wills and living wills

One of my personal goals for 2018 is being more organized than ever, and knowing what documents I need to physically keep, what I am allowed to save in an electronic format , and what I can throw away eases my mind so that I don’t worry about not doing the right thing in saving important papers.

 

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