As the world around you quiets and you accept the challenge of taking control of your life, we congratulate you for working on completing steps one and two of de- cluttering your financial documents. 
Credit Card and Debit card receipts: Keep all receipts of your transactions until your monthly reconciliation of the bank and credit card statements. Receipts for any transactions that have a tax implication must be kept for five years after filing the tax return. Examples of these receipts are for expenses related to medical care and business management. You can discard the rest.
Paycheck stubs: These must be kept until you reconcile them with the annual W-2 form. Upon completion of the reconciliation, the paycheck stubs may be destroyed.
Tax Returns: Keep your tax return folders for five years after the filing. Also, keep any documents that substantiate the deductions and exemptions claimed and listed in the income tax return. If you do not file your tax return, you will need to keep indefinitely. Your tax preparer can guide you on what documents to keep since he helps you file your tax returns.
Investment Statements: Once you verify the total amounts of your investments in the end-of-year statement, you may destroy the quarterly statements. Keep annual statements indefinitely. However, for those investments that have been disposed, keep the statements for at least five years after you included the disposal in your taxes.
Home Purchase and Improvements: Keep documents relating to home purchases indefinitely. However, if the home is sold, keep for five years after filing the income tax return that reflects such transaction. Construction/Additions to your home belong in this category. This is crucial information, which will be needed to file your income tax return upon the sale your home (to establish the cost basis of your home) and it can save you thousands of dollars in taxes.
Very Important Documents: These documents, which include birth certificates, paid loans, marriage license, and passport, must be kept indefinitely, preferably in a safe.
Purchase Documents for Large Purchases: Your car, appliances, equipment, furniture/furnishings qualify as large purchases. Keep the documents until you no longer have the items. Keep warranties until they expire or you no longer have the item. Next week, we will cover what file folders you need to create. The folders will comprise the core of your money management system.
Again, for questions or if you are done with the previous steps to de-clutter and are ready to move ahead now, contact us at: oliviag@fff.education.
Recent Comments