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How Long Do I Need To Keep This

By Walter L. Guertin, CFP®, CPA/PFS
Senior Vice President, Financial Planning

One of the questions we are frequently asked by clients is how long they need to keep certain papers and documents. Because of fear and uncertainty, many decide to take the safe route. THEY DON'T THROW ANYTHING OUT! As a service to our clients and friends, many of whom desperately need to clean out their desks, attics or basements, this article will address many of these questions. Most of the information was taken from a Money Magazine article entitled "The Uncluttered Bookkeeper" written over thirty years ago. Much of it is still applicable today. Another reference is Internal Revenue Service Publication 552. Here is a chance to organize and take the clutter out of your life!

Part of getting your financial papers organized also means deciding what should go in the safe deposit box and what you can keep in a drawer at home. The safe deposit box is, in fact, the safest place you have. But it also is not always convenient, so there are certain documents you need to keep on hand. For some things, such as estate documents, it may be preferable to keep them in both places.

To Be Kept At Home

Income Tax Records

Copies of returns, schedules, work sheets and all supporting documents such as W-2 forms,1099 forms, self-employment records, as well as receipts and canceled checks for medical expenses, interest, taxes, contributions, business and professional expenses.

The normal guideline is three years after the tax-filing deadline. However, if the IRS finds that you failed to report income that represents more than 25% of your gross income, it could go back up to six years. If you prepared your return but didn't file it or if the IRS discovers fraud, there is no time limit. In summary, if you know you're "clean", the last three years of returns is all that you need to retain.

Home Improvements

Receipts and cancelled checks to offset capital gains upon sale of house and also for insurance claim purposes.

Keep indefinitely unless you cease to be a homeowner. Then discard three years after the tax-filing deadline for the year the house is sold.

Investment Transactions

Confirmations of purchases and sales. For most securities, the transaction details will be presented on your investment statements. If you own mutual funds, it is important to keep a record of all reinvested dividends, as these figure into the calculation of your cost basis.

Keep three years after tax filing deadline for year of sale.

Large Purchases and Valuables

Receipts and cancelled checks for furniture, equipment and appliances; needed for insurance claims and tax losses. Additionally, retain current appraisals for valuable jewelry, art and antiques, etc.

Keep as long as you own the items.

Insurance Policies

Accident and health, auto, homeowners, life, etc.

Keep current policies only.

Most canceled checks

Unless needed to document expenditures noted above, keep one year.

Service and loan contracts and warranties

Keep current documents only.

Copy of Wills, Trusts, Durable Powers of Attorney, Health Care Proxies

Keep current. Give originals to executors, trustees, durable power and proxy holders. It is a good idea to also keep current copies in a safe deposit box. Funeral and burial instructions also should be kept in both places.

To Be Kept At A Bank

Household Inventory List

Needed for insurance claims and tax losses.

Keep indefinitely, update periodically.

Properties and Securities

Deeds, leases, car titles, stock certificates, bonds, list of insurance policies with policy numbers.

Personal Documents

Birth certificates, marriage license, military discharge certificate, naturalization papers, etc. Periodically updated list of bank accounts, brokerage accounts, certificates of deposit, and credit cards (with account numbers and branch locations).

Keep indefinitely

Copy of Wills, Trusts, Durable Powers of Attorney and Health Care Proxies

Keep current. Give originals to executors, trustees, durable power and proxy holders.


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