It is that time of year where everyone is working on their taxes and wondering what information to include in their taxes, what type of documents do we keep and how long to keep the documents. I work with several clients who ask me when we are purging and sorting paperwork “How long do I keep certain documents?” My question to them is what is the document and who would need to have a copy of the document? If they are not sure, I ask the question, is this document something your accountant or lawyer would need for tax purposes? Do you need this document to support your tax deductions in your business? Do you need to show this document when you sell your home or are buying additional properties?
The Personal Financial Guru Suze Orman lists on her website some documents to keep for 1 year; paycheck stubs, utility bills, cancelled checks, credit card receipts, bank statements, and quarterly investment statements. Suze Orman also lists what records to keep forever; marriage licenses, birth certificates, wills, adoption papers, death certificates and records of paid mortgages.
I always advise my clients to seek the advice from their accountant, financial advisor and lawyer on what documents they should keep as it pertains to their household. If you are limited with space in your home and/or don’t want to keep certain documents on hand and you know you can shred them later, scan the documents and keep the information on your computer. As listed above, many documents you will need to keep the original paperwork forever but others you can shred at a later date. This is where I state that when you are looking to get rid of some paperwork, it is easier to go to the oldest paperwork first due to it may be easier to get rid of because you do not need it anymore and it can be purged.
Every household is different on what you feel is important and what paperwork needs to be kept, so seek advice first about your documents so it is not taking up valuable space in your home. You will feel at ease knowing what is important to keep and what you can purge so you can take control of your paperwork now.