Tips on Maintaining Financial Records

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How do you store important financial records?

What to keep

In general, retain documents that are related to tax returns, legal contracts, insurance claims and proof of identity. Documents that you can easily duplicate elsewhere are good candidates for the shredder. For example, if you bank online and have access to your monthly statements and cleared checks, you may not need paper copies of the same information.

How long to keep it

A year or less: bank statements, credit card statements, utility bills and annual insurance policies

More than a year: Federal tax returns and supporting documentation, such as W-2 forms (and utility bills if they support a home office deduction) should be kept for a minimum of three years.

Many accountants advise keeping returns and supporting documents for at least seven years. Others suggest keeping tax returns for the rest of your life since they can be helpful when settling estates or in resolving disputes over Social Security benefits. Also in this category are mortgage contracts and supporting documents, receipts for home improvements, property appraisals, annual retirement and investment statements and receipts for major purchases.

Indefinitely: Birth, death and marriage certificates; divorce decrees; adoption papers; citizenship papers; military discharge papers; and Social Security cards.

When you discard records
Shred anything with personal information — your date of birth, Social Security number or account number.

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