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What to keep and what to shred

Articles of Interest.

What to keep and what to shred

Articles of Interest.

To shred or not to shred? on 3/27/2017

Financial clutter: what to keep and what to get rid of

Almost every day we receive money-related documents that we need to decide whether to keep or throw away. The wave of paper and electronic statements, bills, and receipts from purchases and ATM withdrawals may have you feeling like you're drowning in documents. Knowing what to keep and what to discard will save you a pile of trouble... literally.

Holding on or letting go

You probably don't need the receipt for that sandwich you bought a year ago, but there are some items you should keep. Here's a look at how long to hold on to some of those important documents:

Sales Receipts

If you need a receipt for tax purposes, keep it for three years. Otherwise, keep until you can no longer return or exchange the item.

Major Purchase Receipts

Keep until the warranty expires. However, bills for big purchases – such as jewelry, rugs, appliances, antiques, cars, collectibles, furniture, computers, etc. – should be kept in an insurance file for proof of their value in the event of loss or damage.

ATM Receipts

When you balance your account each month, throw out the ATM receipts.

Paycheck Records

Once you have compared to your W2 & annual social security statement, they are safe to shred

Utility Bills

If you are using these as a deduction like a home office or rental property, you’ll need to keep them for 3 years after you've filed that tax return. If not, they are safe to shred after one year.

Credit Card Receipts

Keep them for 3 years if you need them for tax purposes. Otherwise, they are safe to shred after one year.

Credit Union Statements

Keep them for 3 years if you need them for tax purposes. Otherwise, they are safe to shred after one year.

Income Tax Returns

Keep tax returns, as well as supporting documents like W-2 forms, receipts, and real estate closing statements for at least seven years – some experts suggest permanently. Please keep in mind that you can be audited by the IRS for no reason up to three years after you filed a tax return. If you omit 25% of your gross income that goes up to 6 years and if you don't file a tax return at all, there is no statute of limitations.

Any canceled checks or receipts for things like alimony, charitable contributions, mortgage interest, retirement plan contributions, and records for tax deductions taken can have tax implications and should also be kept for at least seven years.

Medical Bills and Cancelled Insurance Policies

Keep for three years.

Records of Selling a House

As this could have tax implications, (documentation for capital gains tax), you should keep such records for seven years.

Records of Selling a Stock

As this could have tax implications, (documentation for capital gains tax), you should keep such records for seven years.

Receipts, Cancelled Checks and other Documents that Support Income or a Deduction on your Tax Return

As this could have tax implications, (documentation for capital gains tax), you should keep such records for seven years.

Annual Investment Statement

Hold onto for 3 years after you sell your investment, unless there are tax implications, then it is a good idea to keep for 7 years.

IRA contribution records

Keep permanently. Why? If you made a nondeductible contribution to an IRA, keep the records indefinitely to prove that you already paid tax on this money when the time comes to withdraw.

Records of Satisfied Loans

Keep for 7 years

What to hold while active

Contracts

Insurance Documents

Stock Certificates

Property Records

Stock Records

Records of Pensions and Retirement Plans

Property Tax Records Disputed Bills (Keep the bill until the dispute is resolved)

Home Improvement Records (Hold for 7 years after the due date for the tax return that includes the income or loss on the asset when it's sold

Keep Forever (these documents should be kept in a very safe place, like a safe deposit box at Sandia Area)

Marriage Licenses

Birth Certificates

Wills

Adoption Papers

Death Certificates

Records of Paid Mortgages

Stashing safely

Would you want the cable guy to see your Social Security number and savings account number lying on your desk? Knowing where and how to store documents could keep you from being a victim of identity theft. Check out these options:

Safe deposit boxes can be rented from Sandia Area for a low annual fee. There are boxes available at every branch location.

Personal safes can be purchased from almost any office supply store for around $30 and up.

File cabinets, storage boxes, and expandable folders are good places to keep things like bills and statements organized and out of sight.

"Paperless" is the way to go these days. With Sandia Area, you can view 18 months of electronic statements (eStatements) online. For backup, you can save a pdf of your statements on your hard drive or a removable drive for safekeeping.

Make sure your passwords are protected.

Taking out the trash

Anything that has your name, address, Social Security number, or any account numbers should be destroyed, rather than just tossed in the garbage. A shredding machine is the easiest way to destroy information – a basic five- or six-sheet shredder can cost between $15 and $40. Crosscut or high-security shredders that slice documents into smaller pieces are more expensive, but may keep you safer from identity thieves. Some even allow you to shred expired credit cards.

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