How Long To Keep Documents

On the heels of finishing our Admin Makeover, I thought I’d share the guidelines I use to keep our filing under control, since it can be a little tricky to figure out how long to keep documents and when to throw them out. 
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Toss After One Year

  • Most utility bills
  • Employment benefit information
  • Most sales receipts (excluding those for itemized deductions and big ticket purchases)
Toss After Three Years
  • Explanation of health insurance benefits (as long as claims are settled)
  • Insurance policies (as long as you have no claims still in process)
  • Bank and credit card statements (if you don’t itemize deductions)
Toss After Five Years
  • Mortgage statements (as long as your year-end statements clearly show the total amount you’ve paid in interest and property taxes over the course of the year)
Retain for Seven Years
  • Tax returns and tax forms (W-2, 1099, etc.)
  • Bank and credit card statements (if you do itemize deductions)
  • Pay stubs
  • Canceled checks and receipts for any tax-deductible expenses (annual mortgage interest and property taxes, deductible business expenses, child-care bills, out-of-pocket medical costs)
  • Select phone and utility bills (to prove residence)
Keep Indefinitely
  • Confirmation slips that list the purchase price of any investments you own
  • Home-improvement records (for as long as you own the home)
  • Receipts for big ticket items (where replacement cost exceeds the deductible on your homeowners’ or renters’ insurance policy)
  • Beneficiary designations
  • Medical records
Other Tips
  • It’s really easy to go paperless for almost everything now – switching your bank and credit card statements to online (paperless) delivery reduces household mess, is environmentally friendly and makes it easier to find documents quickly. Many companies also offer incentives for going paperless (Wells Fargo, for example, paid us $10 for switching to online-only bank statements)
  • Think about investing in a scanner and scanning all the documents you need to keep – once they’re scanned and saved, shred the originals for even better home office organization.

Of course, this all assumes you live in the States. I only worked in the UK for a short while (between graduating and emigrating) and I can’t remember enough about taxes there to be able to create a comparable list for my British readers. Still, this might give you an idea of what to think about when you’re deciding how to reduce your paper clutter.

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