In most homes, paper causes chaos. And it seems to mysteriously reproduce on its own. But how long do you need to keep all your receipts, bank and credit card statements, and other financial documents? Below is useful In most homes, paper causes a mess. And it seems to mysteriously reproduce on its own. But how long do you need to keep all your receipts, bank and credit card statements, and other financial documents? Below is a handy reference you can use to deal with your home’s paper trail.
Throw after One Month
ATM and bank deposit/withdrawal slips
- save in the file folder until the monthly report is received
- reconciliation with your statement to ensure that invoices and payments have been processed correctly
- if for a large purchase under warranty, the receipt staples to the owner’s manual and files for the warranty period
- if for a large unsecured purchase, keep a receipt in case the cost of replacing the item is higher than the deductible on your homeowner’s insurance policy
- if for a small purchase without warranty, it is damaged
Cash purchase receipt
- log in to your checkbook or computer software to ensure that you account for all your purchases
- if for a large purchase with warranty, staple to the owner’s manual and archive for the period of the warranty
- if for a large unsecured purchase, keep a receipt in case the cost of replacing the item is higher than the deductible on your homeowner’s insurance policy
- if for a small purchase without warranty, it is damaged
Credit card receipt
- keep in file until monthly report is received
- reconciliation with your statement to ensure invoices and payments have been processed correctly
- if for a large purchase with warranty, staple to the owner’s manual and archive for the period of the warranty
- if for a large unsecured purchase, keep a receipt in case the cost of replacing the item is higher than the deductible on your homeowner’s insurance policy
- if for a small purchase without warranty, it is damaged
Throw after One Calendar Year
- Bank/Financial Institution monthly report (unless required for home business)
- Broker/Mutual Fund Report (Monthly/Quarterly)
- adjust it with your annual report
- Credit card monthly report
- credit report
- You should request your credit report annually to ensure that all information is accurate and current, especially with regard to accounts that you have closed throughout the year.
- requesting this file annually helps prevent identity theft, so you can see who requested the report and for what purpose
- Monthly Mortgage Report
- adjust it with your annual report
- Payment discount
- broken after making peace with your W-2 or 1099 (US) or T4 (Canada)
- Phone/Utilities Billing
Keep for 7-10 Years
- All T4 Forms – including T4E, etc. (Canada)
- Annual Mortgage Report
- Supporting documents (cancelled checks/receipts/statements) for tax returns including but not limited to:
- donation
- retirement account contributions
- child care receipt
- child support/benefits paid or received
- cost of treatment
- mortgage interest
- property tax payment
- Form W-2 or 1099 (USA)
- Year-end report from credit card (if available)
- Year-End Statement from utility company (if available)
Keep it indefinite
- Adoption Note
- Car/Home/Life Insurance policy information
- keep records of purchases as long as the policy is in effect
- Car Records (ownership certificate/registration)
- keep it for as long as you have your vehicle
- if annual registration is required, keep only the current registration paper
- Birth certificate
- Business Income Tax Return, and supporting documentation, if self-employed
- Death Certificate
- Divorce Agreement/Child Care Court Order
- Investment records clearly show beneficiary information
- purchase notes
- sales records
- Marriage certificate
- Medical records
- Immunization records for children
- Military service records
- Retirement Plan Notes
- Receipt for big house repair/renovation
- Receipts for large purchases that have a long life (refrigerator, stove, freezer, vehicle)
- Religious notes
- School/Education Notes
- Tax refund
- In the US, the IRS has 3 years from the date you file your tax return to check your return for error and up to 6 years to audit your return if they suspect that you have reported your gross income of 25% or more. There is no statute of limitations on auditing when intentional fraud is suspected.
- In Canada, CRA recommends that you retain your tax return, Notice of Valuation, and all supporting documentation for 6 years from the date of filing your personal income tax return.
- NOTE~I recommend keeping them indefinitely as they take up little space and can often be a valuable resource if there is a dispute over such matters as income taxes paid, child benefits/benefits paid or received and pension plan benefits.
- Will and/or Power of Attorney
- must be stored safely in a fireproof home safe or a safe at your financial institution
- Year-end Investment account summary
Now what?
Now that you know what to keep, where should you put it all?
Set up a simple home filing system to cover the basics, and invest in some sturdy cardboard or plastic filing boxes for information you’ll need to keep for a set or indefinite period of time.
And a final warning – when you decide that you no longer need to keep a particular document, make sure you tear it up and DO NOT throw it in the general trash or recycle bin. Sensitive financial information or personal information should always be DESTROYED to avoid possible identity theft which can cause bigger headaches than you can imagine.