Leave it, Save it, or Chuck it?
Posted By :Ben Williams
Posted At : Tuesday, Jul 27, 2010
In this day and age, we are constantly flooded with all sorts of paperwork. Our office space can easily become a myriad of documents filled with anything from credit card bills to car titles and advertisements. You would throw it all out but you know that amidst the towers of useless papers you may have several items that could be profitable to you at some point.
In order to conquer the mountains of paperwork that seem to grow higher each day, it is important to know what you should keep and what you can get rid of. Often people keep much of their paperwork assuming that at some point they will be asked to reproduce it. While this can be true for some documents, it is definitely not for all of them. Here is a guide to understanding what paperwork you should keep and what you can get rid of.
Auto-any paperwork pertaining to your automobiles should be kept as long as you own the car, as well as up to two years after you sell it or get rid of it. Any paperwork pertaining to your car such as receipts of repair, registration or insurance should also be kept for the same duration.
Bank Statements-when you receive your bank statement, make sure you verify it with any of your own records like your checkbook. After you have done this you should file away the monthly statement as these may be important later. As far as checks, save the ones related to taxes, mortgage and home improvement payments and business expenses. If you receive a canceled check, keep it for a year in case the payment is disputed.
Bills-if you haven’t paid the bill yet make sure you keep the paperwork to remind you to pay it. Put unpaid bills in a folder or shelving system that you keep on your desk. Save all bills that you are using as evidence to support any tax deductions. Also, keep bills for large purchases like appliances or furniture to be used for insurance purposes. Bills that have been paid already should be kept for six months to a year and then disposed of.
Coupons and Advertisements- people often save coupons or advertisements thinking they will use them later. If you do this, make sure you routinely go through your file and discard any expired coupons or advertisements for products you know you aren’t going to use.
Credit Card Statements-Credit statements should be kept for tax purposes for seven years.
Employment Records-paycheck stubs can be disposed of after you have compared them to your annual W-2 form. Make sure your last pay stub matches your W-2 form, if not, keep it for seven years for tax purposes after you have solved the discrepancy.
Estate-any documents pertaining to your estate such as your will, trusts or powers of attorney should be held on to indefinitely.
Home-any documents pertaining to the purchase of your home should be kept indefinitely, as well as those that have to do with home improvements, remodeling and additions. Once you have sold your home, hold onto any records pertaining to the sale for another seven years and then dispose of them.
Insurance-if the asset you are insuring is still in your possession it is important to save the coordinating insurance documents. After the asset is sold or disposed of, hold onto the documents for a year to be safe and then shred of them.
Investments-any documents pertaining to investments you’ve made such as stocks or bonds should be held onto as long as you own the investment plus an extra seven years for tax purposes. Any documents dealing with retirement contributions, (401k’s, IRAs) should be held onto forever as well as year end brokerage statements.
Personal Effects-items such as birth certificates, marriage licenses, medical records, social security card, and any death records should be kept indefinitely.
Receipts- if you are in the habit of keeping receipts only keep those that relate to major purchases, and only keep these as long as the warranty on the item is good. You can keep non-major receipts until you verify them with your credit card or bank statements.
Taxes-any tax returns, cancelled or returned checks, or records for tax deductions should be held on to for seven years.
Now that you know what to save and what to get rid of, create a plan for going through your office and organizing your paperwork. Consider purchasing a filing system to manage all of your written documents. Make sure to label individual files so you know exactly where the document you are looking for can be found. You can also purchase a scanner and file your paperwork electronically. This can be very efficient as it allows you to store limitless amounts of paperwork to an external hard drive or CD that can be password protected. Once you figure out how you want to store your paperwork, make sure it is in a safe place where only the right people have access to it.