What Financial Documents Should You Keep Forever
Weve looked at documents that are okay to throw away after a specific time, but there are plenty of documents you should hold on to indefinitely. Important papers to save forever include:
- Birth certificates
- Inheritance documents
- Beneficiary forms
For anything youve bought or insured, you should save the related documents for at least as long as you own them or until the warranty ends. It wont hurt to keep them around longer, though, just to be safe. This includes titles, deeds, insurance policies, warranty documentation and more.
Health insurance policies and related documents are important to keep long term, too. So long as your health insurance is active, you should keep these records. If your coverage ended or youve moved to another insurance company, go ahead and toss paperwork once youre sure you wont need it. The same is true if you receive disability or unemployment benefits. Keep the documentation until you know you no longer need it.
If you have financial records or documents you arent sure youll need, err on the side of caution. Keep any documents until you are positive you dont need them.
Anything You Need For Your Tax Return
- Payments youve received such as wages, interest, dividends and rental income
- Expenses related to income such as work-related outgoings or rental repairs
- Sale or purchase of assets such as property or shares
- Donations, contributions or gifts to charities
- Private health insurance
- Medical expenses, both your own and those of any dependants.
You need to keep these documents for five years after you lodge your tax return in case youre asked to substantiate your claims. And its a good idea to keep your Notice of Tax Assessments for five years as well.
Important Documents For The Self
Keep records of your business income so that you can fill in your tax return and for five years after the 31 January online tax return deadline.
If youre a director of a limited company, you need records of the company itself and its income. You need to keep the records for six years after the end of the relevant financial year. If paperwork isnt your strong point, don’t be an ostrich. Hire an accountant or business manager to help.
If youre a sole trader running an unlimited business, you need to keep a record of your business income and expenses for your tax return alongside your personal income. Keep these records for five years.
Don’t Miss: Wells Fargo Sure Pay
How Long To Keep Mortgage Statements
Any records relating to the purchase of your home should be kept until you sell the house.
You should keep records of your mortgage payments until you get the statement in the mail.
And then you want to keep these monthly statements until you get the tax form showing the interest you paid for the year to make sure it matches.
This is because you can write off mortgage interest on your taxes.
Additionally, a portion of any gains you make on the sale of the home can be excluded from your taxes, so by keeping your statements, you have proof of the amounts you paid.
The same goes for any real estate you purchase.
You want to keep the financial documents until you sell the property.
The Irs And Tax Records
The Federal Deposit Insurance Corporation website recommends keeping any cancelled checks or bank statements pertaining to taxes for at least seven years. The IRS can come after you for significant tax under-reporting for that length of time. If you do your banking online, you might ask your bank to send you copies of tax-sensitive checks so you have a hard copy for your files.
Video of the Day
You May Like: How To Edit Bank Statement Pdf
How Long Should You Keep Credit Card Statements
If you use a , make sure you can access the records for at least three years to serve as proof for your tax returns.
For personal credit cards, its best to keep statements for 12 months to verify charges made to you, services you paid for, business expenses, charitable donations, orif disputedan on-time loan payment.
Keep For Next Years Tax Season
Saving your important papers through the year and keeping your records organized will make tax preparation that much simpler. Here is a sampling to make tax time easier.
- Proof of income – dividends, interest, bank statements, brokerage statements, W-2s, mutual fund statements and 1099s.
- Deductions – medical and dental expenses, child care and charitable giving.
- Receipts – invoices and mileage logs.
- Residential – closing and tax documents.
Also Check: Td Bank Overdraft Limit Amount
How Long To Keep Student Loan Documents
You want to keep all student loan documents until you paid back the loans in full.
At that point you should receive a letter showing proof of a zero balance.
You can then shred the student loan documents but keep the statement showing your loans were paid in full.
And while you are paying off your student loans, keep the monthly statements until you get a year end statement.
If you dont get a year end statement showing all of your payments for the year, request one so you can shred the monthly statements.
The Easiest Way To Keep Records
The IRS says you can use any recordkeeping system as long as it âclearly shows your income and expensesâ. But unless youâre auditioning to appear on an episode of Hoarders, you should probably go paperless and store everything electronically.
The IRS accepts digital copies of documents as long as theyâre identical to the original copies.
Digitizing your records is also a great way to avoid accidentally tossing them in a move or an overzealous fit of spring cleaning. Plus, letâs not forget that paper records can fade, and are susceptible to damage. Telling the IRS that âthe dog ate my tax recordsâ simply wonât fly.
We recommend scanning every record and receipt in your business, tagging it with a descriptive name, and archiving it forever.
Here are some tools that can make digital recordkeeping easier:
- Benchâyou can upload all your receipts and store them in the Bench app, with no storage limits.
- Secure cloud storage services like Dropbox, Evernote, or . Any of these websites will support scanning and storing.
- A dedicated business document scanner, like the Kodak Alaris .
Read Also: Regions Bank Ringgold Road
Utility Bills Deposits And Withdrawal Records
If youre self-employed, you may need your utility, cable and cell phone bills for tax purposes. Otherwise, you can dispose of them as soon as you verify your payment was processed. You can also dispose of bank withdrawal and deposit slips after verifying them with your monthly statement.
3 ways to keep your documents secure
Its important to make sure your sensitive information is safe and accessible.
Safeguard your information
For physical documents, designate a safe, out-of-the-way place in your home to store all paper records that protects them from damage or theft. For digital records, be sure to archive and back up all electronic records. Its a good idea for these records to be password protected.
Guard your financial accounts
Use complex passwords to keep your account information safe. Make sure your username and password combination is different from the ones you use for personal email, online merchants and social media accounts. Protecting your computer with antivirus software is also a good idea.
Properly dispose of paper documents
Youll put yourself at risk of fraud or identity theft if you simply throw away private documents, such as financial statements. Invest in a cross-cut shredder that will eliminate all traces of your personal information, or search for free shredding events in your community. Also consider having paperless statements and documents, which can help reduce the risk of identity theft posed by lost or stolen mail.
How Long To Keep Credit Card Statements
You should keep the receipt for anything you purchase with your credit card until the statement arrives.
Once you verify they match and the return period on the item has passed, you can toss the receipts.
If there is a tax related purchase, you should keep the statement for 7 years.
Otherwise, there is no need to keep the statement any longer than 60 days.
As with banks, you could get statements online too. Though again, most only go back a certain number of years.
I am not aware of any credit card company charging the client to get old statements, but you never know.
Recommended Reading: Do Banks Buy Silver Bars
Secure Your Loved Ones Documents
Nobody wants to think about paperwork after losing a loved one. However, youre the only one able to make sure these documents stay safe and secure. Its easy to focus on the funeral and other arrangements, but dont overlook these documents above.
Keeping track of your loved ones forms protects them from fraud and helps with legal recordkeeping. This is a difficult time. Make sure youre following the right steps to ease the burden of the entire family.
If you’re looking for more, read our guide on how long to keep tax records after a death.
Post-planning tip: If you are the executor for a deceased loved one, handling the details of their unfinished business such as dealing with bank statements can be overwhelming without a way to organize your process. We have a post-loss checklist that will help you ensure that your loved one’s family, estate, and other affairs are taken care of.
Can I Recycle Shredded Paper
That depends. According to the City of Seattle’s website, confetti-like pieces from cross-cut shredders have no retrievable fibers for recycling. Cross-cut shredded paper can be added to yard waste carts or compost. Other sources indicate that shredded paper can be recycled if its bundled, so check with your waste service provider.
Here are some suggesting for re-using shredded paper: Substitute for tissue paper in gift bags or baskets, ship fragile items, line your hamster’s cage, add it to a worm composting bin, kids’ art projects, such as stuffing pillows or bean bags.
Some commercial shredders pulverize paper. Others cross-shred. Many commercial shredders transport the destroyed documents to a recycling center to be used as paper or other products. Check with individual companies per their procedures.
Also Check: Chase Zelle Limit Per Day
Do You Need To Shred Old Bank Statements
There is no legal obligation to shred your old bank statements, bills, or any other important documents. That said, if you are going to throw them away, shredding them or mulching or burning them is definitely for the best. They have deeply personal information on them, and its no fun to become the victim of identity fraud. So, invest in a cheap shredder, get it all chopped up, and recycle the whole lot.
How Can I Keep Financial Documents Safe
Both paper and electronic documents need to be kept safe, from loss, damage and theft. Financial documents can be highly valuable to criminals looking to commit identity theft, in particular bank statements and utility bills, which can be used as proof of identity or address. Lost or destroyed statements can also be a pain if you need to prove your income or resolve a dispute regarding a financial product.
Paper documents that you wish to keep should be stored somewhere secure, like a locked filing cabinet or even in a safe if you have one. Older documents, that you have decided not to keep, should be shredded before being thrown in the recycling or rubbish bin. Ripping a letter up is not always enough, as it can be pieced back together to reveal key information.
Electronic documents should also be locked away using secured passwords and encryption. If you store bank statements or bills in your email or on a cloud server, make sure to use a strong, random password for the account, and enable two-step verification where possible. If you store documents on a hard drive, make sure it is in a password-protected folder on a secure computer.
If you are worried about the security of your personal data, your Equifax Credit Report & Score, which includes WebDetect, is free for the first 30 days then available for Â£7.95 monthly, and alerts you daily if we find your personal data on websites used by fraudsters.
You May Like: How To Transfer Money From Skylight To Another Bank
Regular Statements Pay Stubs
Keep either a digital or hard copy of your monthly bank and credit card statements for the last year. Its a good idea to keep your digital copies stored online if you choose to go paperless. You should also hold on to pay stubs so that you can use them to verify the accuracy of your Form W-2 when tax season arrives.
Documents To Store For A Certain Period Of Time
Imagine having a lifetime’s worth of bank statements and bills piled up on your desk. After even just a decade, that stack would likely be outrageously big. There are many types of documentsmostly financialthat you should keep for a certain period of time, but don’t need to store forever. You may need to reference them monthly or weekly for a while, then they just become another piece of paper lying around creating clutter.
The tricky part is knowing when you can get rid of these types of records. There’s no good answer for everything, but recommended guidelines based on what it is:
- Bank statements: One month.
- Bills: One year for anything tax or warranty related all other bills should be shred as soon as they have been paid.
- Paychecks and pay stubs: One year, or until you’ve received your W-2 statement for that tax year
- Investment records: Seven years after you’ve closed the account or sold the security.
- Tax documents: Seven years, including your filing and all accompanying documents such as W-2s and receipts.
- Sales receipts: Keep for the life of the warranty for major purchases such as appliances and electronics. For things such as groceries and clothing, only keep the receipt until you know that it won’t be needed to return merchandise.
- Leases: Keep until you’ve moved out and have received your deposit back from the landlord.
- Home improvement receipts: Keep until the home is sold.
- Vehicle records: Keep until the boat, car, or motorcycle is sold.
Recommended Reading: Verify Bank Venmo
How Long To Keep Business Financial Records
Guidelines for business record keeping is more established and carries more repercussions if not adhered to. Businesses deal with documents regarding employees, clients, and finances, and are all kept for varying periods of time depending on their importance. The general minimum amount of time to keep business records is a minimum of 7 years. The following documents and records should be kept
- Business Tax Returns and other supporting documents: Until the IRS can no longer audit your return.
- Employment tax records: For at least 4 years after the date they were paid. These include timesheets, salaries, benefits, and UIF payments.
- Employee files: For at least 7 years after an employee has left, or for up to 10 years if a claim against the business has been laid.
- Income taxes: For 7 years if there are deductions for debt loss.
- Worker compensation: For a minimum of 10 years.
- Ownership records: Indefinitely. These are business formation documents, meeting minutes and property deeds, etc.
- Accounting services records: For at least 7 years. Check registers, budgets, ledgers, and audit reports are examples of these records.
- Business operational costs and expenses: For at least 7 years. This type of documentation can be considered supportive in terms of tax returns, eg. bank account statements, credit card statements, canceled checks, or cash receipts.
Documents To Keep For Ever
*Marriage/birth/death certificates, wills, house deeds , and adoption records are only issued in paper form. Losing any of these is a major hassle and can be costly to replace. Keep the paper copies in a locked and fire-resistant security box.
*Your car’s V5C logbook is also a paper document, which you must pass onto the new owner if you sell on your car. Keep it safe!
*Life insurance: Make sure your beneficiaries know where your insurance policies are kept and who the main contact is. The same goes for your will tell your family where its kept.
*Pensions: Make sure you keep all your documentation, otherwise you could end up missing out on hard-earned money. Don’t forget to tell your pension providers when your contact details change!
*Medical records: A medical exemption certificate lasts for five years or until your 60th birthday. Keep a note of your NHS number as you will need this when if you change GP. Keep hold of your Childrens Personal Child Health Record , if you have a paper version . It might be an idea to hold on to your Covid vaccination card too although you can also download your Covid pass from the NHS app.
*National Insurance number: If you’ve lost your NI card you should be able to find the number on a payslip, P60 or on a tax return. If not, you can apply for a replacement card.
*Pet vaccination record: Keep proof of all their jabs and make a note when they need boosters. A pet passport lasts for ever, provided rabies vaccinations are up to date.
Don’t Miss: Bankofamerica/activatedebitcard Unemployment
How Long Should You Keep Old Bank Statements
The amount of paperwork that you have to deal with can seem scary at first but keeping bank statements all depends on what kind of document and how you use it.
Bank and Credit Card Statements
Aim to keep your statements for your bank accounts and for at least one year. If you go paperless, you find a digital copy of your statements from the bank. Required by federal law, Banks must keep records for five years. For more details on this, check with your bank to see how to access your old statements.
How Long To Keep Bank Statements for the IRS
The IRS has three to seven years to audit you if it suspects you made an error on your tax return. Keep a copy of your tax return and other tax documentation for at least seven years to be safe. This includes:
- W-2 forms
- Bank and brokerage statements that support your tax return
- Tuition payments
Canceled checks should be kept for one year unless you need them for tax purposes. If the bank does not return your canceled checks, you are able to request a copy for up to five years.
You should keep your bill payments for at least one month, unless you need them for tax purposes.