In most homes, paper causes clutter. And it seems to mysteriously multiply by itself. But just how long do you need to keep all those receipts, bank and credit card statements and other financial papers? Below is a handy In most homes, paper causes clutter. And it seems to mysteriously multiply by itself. But just how long do you need to keep all those receipts, bank and credit card statements and other financial papers? Below is a handy reference that you can use for dealing with your home paper trail.
Toss after One Month
ATM and bank deposit/withdrawal slips
- keep in a file folder until monthly statement received
- reconcile with your statement to ensure that charges and payments have been properly processed
- if for major purchase with warranty, staple receipt to the owner’s manual and file for the term of the warranty
- if for major purchase without warranty, keep receipt if item replacement cost is higher than the deductible on your homeowner’s insurance policy
- if for minor purchase without warranty, shred
Cash purchase receipts
- enter into your chequebook or computer software to ensure that you are accounting for all your purchases
- if for major purchase with warranty, staple to the owner’s manual and file for the term of the warranty
- if for major purchase without warranty, keep receipt if item replacement cost is higher than the deductible on your homeowner’s insurance policy
- if for minor purchase without warranty, shred
Credit card receipts
- keep in file until monthly statement received
- reconcile with your statement to ensure charges and payments have been properly processed
- if for major purchase with warranty, staple to the owner’s manual and file for the term of the warranty
- if for major purchase without warranty, keep receipt if item replacement cost is higher than the deductible on your homeowner’s insurance policy
- if for minor purchase without warranty, shred
Toss after One Calendar Year
- Bank/Financial Institution monthly statements (unless needed for home business)
- Brokerage/Mutual Fund Statements (Monthly/Quarterly)
- reconcile with your annual statement
- Credit card monthly statements
- Credit reports
- you should request your credit report annually to ensure that all information is accurate and up-to-date, especially with regard to accounts you have closed in the course of the year
- requesting this file annually helps to prevent identity theft, so you can see who has requested the report and for what purpose
- Monthly Mortgage Statements
- reconcile with your annual statement
- Pay stubs
- shred after reconciling with your W-2 or 1099 (US) or T4 (Canada)
- Telephone/Utility bills
Keep for 7-10 Years
- Any T4 Forms – including T4E, etc. (Canada)
- Annual Mortgage Statements
- Supporting documentation (cancelled cheques/receipts/statements) for tax returns including but not limited to:
- donations
- retirement account contributions
- child care receipts
- alimony/child support paid or received
- medical expenses
- mortgage interest
- property tax payments
- W-2 or 1099 Forms (US)
- Year End statements from Credit cards (if provided)
- Year End statements from utility companies (if provided)
Keep Indefinitely
- Adoption Records
- Auto/Home/Life Insurance policy information
- keep purchase records for as long as policy is in force
- Automobile Records (ownership certificate/registration)
- keep for as long as you own your vehicle
- if annual registration required, keep only current registration paper
- Birth Certificates
- Business Income Tax returns, and supporting documentation, if self-employed
- Death Certificate
- Divorce Agreement/Child Custody Court Orders
- Investment records clearly showing beneficiary information
- purchase records
- sales records
- Marriage Certificate
- Medical records
- Immunization records to children
- Military service records
- Pension Plan records
- Receipts for major home improvements/renovations
- Receipts for major purchases that have long life expectancy (refrigerator, stove, freezer, vehicles)
- Religious records
- School/Education records
- Tax Returns
- In the US, the IRS has 3 years to from the date you file your tax return to examine your return for errors and up to 6 years to audit your return if they suspect that you have underreported your gross income by 25% or more. There is no statute of limitations on an audit when deliberate fraud is suspected.
- In Canada, CRA advises you to keep your tax returns, Notices of Assessment, and all supporting documentation for 6 years from the date of filing your personal income tax return.
- NOTE~I recommend keeping these indefinitely because they take up little space and can often be a valuable resource if there is any dispute over such things as income tax paid, child support/alimony paid or received and pension plan benefits.
- Will and/or Power of Attorney
- should be kept securely in a fire-proof home safe or safety deposit box at your financial institution
- Year End Investment account summaries
Now what?
Now that you know what to keep, where are you supposed to put it all?
Set up a simple home filing system to cover the basics, and invest in a couple of sturdy cardboard or plastic filing boxes for the information you should keep log-term or indefinitely.
And a final caution – when you decide that you no longer need to keep certain documents, make sure you shred them and DO NOT put them in the general trash or recycling. Sensitive financial information or personal information should always be DESTROYED to avoid any chance of identity theft that could lead to headaches greater than you can imagine.
