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Document Retention Guidelines and Record Keeping

Record Keeping Guidelines

What can you shred vs. what should you save?

Customers often ask how long they should keep a particular document or financial record. So, I decided to draft these Document Retention Guidelines and Record Keeping Guidelines to help you decide what you need to keep.  So many of my clients hold on to papers, because they think they will need them someday.  There are many articles and opinions on this topic, and their opinions vary depending on the industry of the writer.  I reviewed several CPA, organizer, shredding company and financial institution websites while researching for this article. The document retention schedule listed below is my opinion based on my analysis of all the data reviewed. Your individual circumstances should always be taken into consideration before shredding any information.

Before covering document retention guidelines, let’s talk about shredding vs. tossing.  According to the Department of Justice Statistics, in 2014, an estimated 18 million people were victims of identity theft.   Identity theft is absolutely proliferating.  This statistic represents 7% of the population and is an increase from the 2012 reported statistics. Shred documents that have personal information, account numbers or other identifying data.

Some documents simply should be kept in a safe place forever.  Examples of these are as follows:

  • Marriage Licenses
  • Birth Certificates & Adoption Papersdocument retention guidelines
  • Wills
  • Death Certificates
  • Retirement & Pension Records
  • Trust documents
  • Records of Paid Mortgages

Before you ask whether or not you should keep something, ask yourself, “Can I access this online?” and “Do I need this for my taxes?”.   If you can get access to the online information, you do not need to keep the paper version. For example, most product manuals, bank statements and bills can be accessed online now. We really only refer back to about 25% of what we keep.  So if you can get to it online, you should toss the paper version.  The exception to this rule is that all records and documents that are required to process your taxes should be kept for 7 years in case of an audit. Remember that the IRS will accept scanned versions of receipts and other important documents.  Scanning documents and records will reduce your paper pile, but be sure to back it up to a safe place that is not on your PC.

What to hold while active

  • Contracts
  • Insurance Documents
  • Property Records
  • Stock Records & Certificates
  • Property Tax Records Disputed Bills (Keep the bill until the dispute is resolved)
  • Warranty Documents – when the warranty is no longer valid, you can toss it.

What to keep for 1 month

  • ATM Printouts  – You can toss after you verify that the bank has recorded the transaction correctly.
  • Paycheck Stubs – You really only need proof of your last paycheck stub from any employer.  Once you have compared to your W2 & annual social security statement for accuracy, this information is no longer necessary.
  • Utility Bills – You can toss these out after one month, unless you’re using these as a deduction like a home office –then you need to keep them with your tax records.
  • Cancelled Checks – you can get copies of cancelled checks from your bank.  If you need copies for your tax return, you should keep them with your tax records).
  • Credit Card Statements – Most of the time this is just a record of charges and you can obtain them from the credit card company.  So, the general rule is to keep them for 3 months.  (Unless needed for tax purposes or company reimbursement).
  • Bank Statements – If yours are available online – you do not need these.

Other Statements and Documentation:

  • Income Tax Returns – The general rule on keeping tax return information is 7 years.  (Please keep in mind that the IRS can audit you for no reason up to three years after you filed a tax return. If you do not file or you file a false claim, you can be audited at any time).
  • Sales Receipts – Keep until your warranty expires or until you can no longer return or exchange.
  • Investment Statements – Keep at least one month on hand while the investments are active, the quarterly statements should be keptuntil you get your year-end annual statement and then your year-end statement should be kept with your tax records.  All other materials like prospectus documents, address confirmations, annual reports, privacy statements, voting requests; you should only keep them if you are going to act on them within 2 weeks.  If not, toss them.
  • Medical Records – Personal health records should be kept on every family member.  Keeping an updated document containing a list of doctors with complete contact information, shot records, medical history including surgery dates and prescriptions will save you time and energy in the future.
  • Medical Bills and Medical Insurance Statements: The general rule is 5 years from the date of service.  If you are still being treated, you may want to keep them for 7 years from the date of service.  If you can claim medical expenses on your tax return, it is recommended that you keep the records for seven (7) years from the end of the year in which they are claimed.
  • Life Insurance Policies: It is recommended that you keep life insurance policy information for the life of the policy plus three (3) years.
  • Home Insurance:The minimum timeframe suggested is five years. However, if you think that you may have any issues in the future, you should keep your records for 10 years.
  • Home Improvement Records – If the home improvement is tax-deductible, you should follow the tax rules.  All other records should be kept for proof of the contractor’s guarantee of workmanshipIf you think that a future buyer would want the records, keep them until you sell the property.

Scanners have made document retention so much easier.  If you find filing and retrieving information an overwhelming task, a scanner could be your answer.  Scanning records and storing them on your computer can make items easier to retrieve, but just like filing, you have to set aside time to maintain your records.  If you are overwhelmed with the idea of having to scan your old records, you can start with the new documents you receive.  In all probability, by the time you get to the old records, you will have more to shred than to scan.  There are also several companies that will scan all of your old records for a fee. Professional Organizers, like Configuration Connection, can also help you scan records, setup filing systems and decide what to purge.  If you have questions about this article or if you need help with your paper and electronic records, call Configuration Connection at 972-365-0255.


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