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To Throw
or not to Throw out (old financial records) - that is the question.
It's that time of year again! (No, we don't mean trying to stick to your New Year's
resolutions!) We mean it's
time to clear out year-end statements, old bills and financial records, and
gear up for tax time! The
basic questions to ask yourself during this process include: - Should I keep this?
- What will my accountant need?
- What can I safely discard?
How many of you have gone
searching for a vital document, only to realize that it got tossed a few months
back. If only you'd known you were
going to need it... What follows is a guide to help you decide
what to keep and what to throw out so you need never be in that quandary again.
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The Guide
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1. Tax Returns. Keep them
for 7 years. The IRS has 3 years
from your filing date to audit your return if it suspects good faith
errors. Six years to challenge it
if it thinks you underreported your gross income by 25 % or more.
2. IRA Contributions.
Keep them permanently.
3. Retirement/Saving Plan Statements. Keep the quarterly statements from 401(K) and other plans
until you receive the annual. If
it all adds up, shred the quarterly and keep the annual until you retire or
close the account.
4. Bank Records. Go
through them and only keep those checks related to taxes, business expenses,
home improvements or mortgage payments.
Shred the rest.
5. Brokerage statements.
Keep them until you sell the securities.
6. Bills. Go through your
bills once a year. Only keep those
for big purchases i.e. jewelry, cars, appliances, furniture and computers etc.
for proof in case of loss or damage.
7. Credit card receipts and statements. Keep your original receipts until you get your monthly
statement - shred the former if both add up. Keep the statements for seven years only if tax related
expenses are documented.
8. Paycheck Stubs. Keep them for one year once you've verified all the
info on your W-2 form is accurate.
9. House/Condo records.
Keep from six years to permanently. Keep all records documenting purchase price, permanent
improvements and expenses incurred during buying and selling. Holding on to evidence of improvements
is important as it adds to your original house cost and can mean a greater
profit (capital gains) if/when you sell the house.
Copyright 2009, CAIM LLC
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For those of you with questions, feel free to call me at 203.966.2712
Also please visit my website at www.catherineaveryinvest.com
to receive your
*FREE Complimentary Portfolio Evaluation*
*Please pass along this newsletter to friends and family*
to spread the word!
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