Paperwork Nightmare
You may need to plan on several hours to go through everything, but the relief will be worth it!
All of us deal with having more paperwork than we know what to do with these days. We are afraid to throw anything out, but we don’t have file drawers enough to keep it all
This is a list to help you organize your paperwork, and get rid of excess paperwork you really don’t need to keep. Be sure to remember when you dispose of “stuff”, if you don’t have any way to shed your things, at least make sure names, numbers, etc. are REALLY minced up small or burnt in the fireplace. Identity theft is no small problem to face, so guard yourself and your family.
Here is what you much keep, for at least a good while:
1. Canceled checks that are related to tax deductions or major purchases. If you pull these checks out from the rest each month it will save you lots of time later. Keeping bank statements available to see on line can be a bit of relief – but remember to check your accounts regularly.
You will probably need to print specific tax related checks if you pay someone to do your taxes. Also keep any charitable giving and medical expenses. You can file these in an envelope saying CHECKS for TAXES (include the year).
2. Keep a file with purchase and sale documents, including IRS Form 2119 for every home you’ve owned.
3. Keep a file of capital home improvement costs. Routine repairs don’t count. Only things like new roof, remodeled kitchen, etc.
3. Credit card records – keep for 6 years.
4. Health records are forever. That is for your benefit. It can be a safeguard for you to request a copy of your medical records whenever any procedure is done, or when a medical emergency arises.
5. Contracts (even those paid) are to be kept for 7 years past the expiration date.
6. Investments, contributions to IRA’s, and brokerage accountings.
7. A will. (VERY important for your family – even if handwritten and witnessed by three people is better than nothing!).
8. IRS returns. The IRS has three years to examine your return, and six years if there is a substantial under-reported income.
TRUST ME ON THIS ONE – if you have the misfortune to be audited you will need to come up with a TON of paperwork. The IRS can audit you for more than just one year – several, if they choose to do so.
If someone prepares your income tax statement for you make sure they are savvy with the IRS and current laws. If you are fined for errors (whether your errors or the bookkeeper) you can pay huge fines, compounded, and increased on a daily basis
1. Deeds and records of ownership. You should keep documents as to the condition of your home and a written inventory of goods in it.
2. Birth, marriage and death certificates. You should also keep passports, even old ones, and social security cards.
3. Stock and bond certificates
4. Make a list of all insurance policies and agents.
5. Adoption papers, divorce decrees and child custody agreements.
Even if you don’t have a lock box to keep them in, make copies of these items and store them separately in case you need them.
YEAH! Now we are down to the toss out stuff!
1. Expired insurance policies.
2. Non-tax related checks (but they have to be more than three years old:(.
3. Records for items you no longer own. (Cars, boats, etc.)
4. Pay stubs going back more than two years.
Have fun and get to shredding and trashing all the useless garbage!
