Asset Planning, Inc Blog

The latest from the team.
Font size: +
2 minutes reading time (383 words)

Record Retention: Keep it or Toss it

After your taxes are complete it is always a good idea to go through your records and organize what you should keep and what you can get rid of.

How long to keep records is a combination of judgment and state and federal statutes of limitations. Since federal tax returns can generally be audited for up to three years after filing and up to six years if the IRS suspects underreported income, it’s wise to keep tax records at least seven years after a return is filed. Requirements for records kept electronically are the same as for paper records. Many records can easily be kept on-line now and downloaded and to your computer, external drive or cloud account.

Records Retention Guideline # 1: Some items should never be thrown out

This is because these items would be hard to replace and you may be asked to provide them later in life. I suggest storing these “permanent records” in an expanding file or wallet – preferably in a fire safe box:

  • Income tax returns: if the return is uncomplicated then you only need to keep it for 7 years.
  • Important correspondence.
  • Legal documents.
  • Vital records (birth/death/marriage/divorce/adoption etc.).
  • Retirement and pension records.
  • Year-end investment statements.
    • If the investments are transferred to another account make sure the cost basis has transferred over correctly.
    • IRA non-deductible contributions (Form 8606).
  • Will and Trust documents.
  • Records of paid mortgages and other loans.

Records Retention Guideline # 2: Everything Else

You should retain these records according to the following guidelines:

  • Home purchase documents – Ownership period + 7 years.
    • Property records/builder contracts/home improvement receipts (keep until property is sold – needed for taxes)
  • Car purchase and sale records (keep until car is sold + 3 years).
  • Insurance policies (keep for life of policy).
    • If policy is changed to another company make sure that you keep the files together.
  • Sales receipts (keep for life of warranty or life of the item on large purchases).
  • Warranties and instructions (keep for life of product).
  • Medical bills – keep for 3 years or longer if there are any reimbursement questions.
  • No need to keep monthly statements for credit cards, bank statements, utilities, etc. if you receive a year end recap or are able to go online and view up to 3 years of statements.
×
Stay Informed

When you subscribe to the blog, we will send you an e-mail when there are new updates on the site so you wouldn't miss them.

Mortgage Rates Hit Historic Lows
CARES Act Stimulus Summary

Search Blogs Module

Wait a minute, while we are rendering the calendar
family members privacy settings drive /usb phone cell phone service provider identity thieves ID card Charles Schwab ice cream event padlock hurricane Dorian driver license payments IRS deadline Medicare Part B premiums privacy notices partner /owner fun facts estate planning tax filing deadlines paper records consumer spending COVID -19 virus CARES Act April 18 2017. assets Part B emergency kit pet donation drive pet supplies donation counts checklists 900 number Asset Planning cell phone carriers offer trust pet Medicare question VOIP landline phones documents business hours Wells Fargo customers parking spots years prescription eyeglasses markets news coverage check lists February 14 car loans Financial Planning Magazine web address emergency folder Expired medications D premiums stock pile tax season retirement planning Open Enrollment credit monitoring service 401K gap insurance president Trump credit card company clients birth certificates Roth IRA self-help topics Treasury Department credit freeze estate investment statements April 15 July 3 rd records notary services Coronavirus Aid clone counterfeits Facebook profile account numbers fun atmosphere coronavirus cell phone provider summer DNA test kits 70 1/2. relief efforts cell phones water … FSA client portal https :// October 1 2020. clients show support TD Ameritrade pet industry Puerto Rico disaster areas home security spread Part D premiums . tax returns portal July 6 interest phone companies email notifications blog post interest rates paperwork clutter Healthcare home mortgages California Lions Friends Social Security tax records tax deadlines EEChecklist-Kits.pdf stockpilingchecklist.pdf ice cream https ://seekingalpha April 11 cell phone SIM swap scam Legal robocalls earnings fallout jury duty Amazon Medicare Economic Security house sitter Notary Public Flexible Spending Account 2017 TD Ameritrade National LINC Conference July weekend rescue organizations 2017 IRA contributions health care services donation items home retirement insurance policies National Ice Cream month settlement options home emergency kit 2018 IRA contributions wells Fargo increase cell phone carriers official certification policy spring cleaning Kiplinger Letter emergency kits vision screening “ skimmer ”. company flash drive asset Planning retirement plans Auto insurance home break-ins scams opt-out information Facebook items September 9 app spam phone card reader operations manager 4 pm -8pm offering insurance Kraig Mathias Wells Fargo employees toilet paper retirement accounts illiegal robocallers Shred paperwork Medicare Advantage memorial Day weekend integral member January 10 Victor Dergunov Erin Nelsen vacation insurance policy Medicare Part B CFP ® market turmoil CERTIFIED FINANCIAL PLANNER exam student loans media accounts chip-enabled EMV cards Retirement Contribution Limits Orange County Fox News story tax deadline Federal Trade Commission website credit score Two-Step Verification Affordable Care Act trustee Independence Day Ice Cream Social June 29 Open House IRS banking Joey Gonzales fees identity theft breach health care costs earthquake app stimulus package 2017 Equifax breach holidays approach Orange County Superior Court FEMA website Mobile Banking Security Tips text messages 20 year anniversary phishing scams 23 andme team members credit card fraud bottom line CA FTB money July 4 executive order pets Brexit vote borrowing money life saver debt people medications Social Security Administration phishing sites estate planning direction information Medicare plan contribution limit September 30 2020. IRA accounts Labor Day home emergency preparedness kits September 8 Supplemental Security Income credit cards non-prescripstion sunglasses