Spring Cleaning
It’s Spring – the time of year that we often think about tidying up and starting fresh. Things go well with our chore until we hit “the pile”. You know the one I’m talking about: all the papers that you haven’t filed or shredded, that have been stacking up since at least last year, and that have been topped by the freshly printed tax return. Do you really need to keep it? What can you toss? What might you need?
Let’s start with what’s likely at the top of the pile: the tax return. The IRS suggests you keep those for three years from the date you filed. In some instances, they suggest seven years. I’m a better safe than sorry type person and I suggest hanging on to it for seven years. Be sure to keep the supporting documentation (receipts, medical bills, pay stubs, etc.) with the return.
What about those account statements? If you receive paper statements, keep the monthly ones for one year. Then shred those and keep your annual, or year end, statements for at least seven years. If you have old investments (prior to 2011), it may be a good idea to hang on to those annual statements. Having those will make calculating the cost of the investment easier, if the need arises. Fun fact: companies were not required to track cost basis information for you prior to 2011.
What should you keep forever? Things like wills, trusts, powers of attorney, marriage licenses, birth certificates, adoption papers, and social security cards should always be maintained in a safe location.
What else is important? Original life insurance policies (Life, Long Term Care, etc.) should be kept in a safe location while they are active. Companies purchase other companies and merge and sometimes information is buried or lost within transitions. These policies are proof of ownership. The same goes for property records, stock certificates, and in-force contracts.
What can I toss or shred? Receipts for purchases that are not tax deductible or a large purchase that may be covered under a warranty (refrigerator, hot water heater, etc.) can be tossed. Utility bills, credit card statements, and the like can be shredded once you confirm the charges and have proof of payment.
Before you know it, you’ll have conquered the mountain of paper and be on to window washing. Just be sure to shred (and recycle) any documents that contain personal information rather than tossing them in the trash. If this sparks questions or you find a piece of paper we didn’t address, contact us!