In most homes, paper causes clutter. And it seems to mysteriously multiply by itself. But how long do you need to keep all those receipts, bank and credit card statements, and other financial documents? Below is a practice In most homes, paper causes clutter. And it seems to mysteriously multiply by itself. But how long do you need to keep all those receipts, bank and credit card statements, and other financial documents? Below is a helpful reference you can use to deal with your household paper trail.
throw away after a month
ATM and bank deposit/withdrawal receipts
- keep in a file folder until monthly statement is received
- reconcile with your statement to ensure charges and payments have been processed correctly
- If it is a major warranty purchase, staple the receipt to the owner’s manual and file for the term of the warranty
- if it’s a major non-warranty purchase, keep your receipt if the replacement cost of the item is more than your homeowners insurance deductible
- if it is for a minor purchase without guarantee, shred
cash purchase receipts
- go into your checkbook or computer software to make sure you’re accounting for all your purchases
- if it is a major warranty purchase, staple it to the owner’s manual and file it for the term of the warranty
- if it’s a major non-warranty purchase, keep your receipt if the replacement cost of the item is more than your homeowners insurance deductible
- if it is for a minor purchase without guarantee, shred
credit card receipts
- keep on file until monthly statement is received
- reconcile with your statement to ensure charges and payments have been processed correctly
- if it is a major warranty purchase, staple it to the owner’s manual and file it for the term of the warranty
- if it’s a major non-warranty purchase, keep your receipt if the replacement cost of the item is more than your homeowners insurance deductible
- if it is for a minor purchase without guarantee, shred
Throw away after one calendar year
- Monthly bank/financial institution statements (unless required for home business)
- Brokerage/mutual fund statements (monthly/quarterly)
- reconcile with your annual statement
- Monthly credit card statements
- credit reports
- You should order your credit report annually to make sure all information is accurate and up-to-date, especially regarding accounts you’ve closed over the course of the year
- Requesting this file annually helps prevent phishing, 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 form, including T4E, etc. (Canada)
- Annual mortgage statements
- Supporting documentation (canceled checks/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
- Forms W-2 or 1099 (US)
- Credit card year-end statements (if provided)
- Year-end statements from utility companies (if provided)
keep indefinitely
- adoption records
- Auto/Home/Life Insurance Policy Information
- keep records of purchases for as long as the policy is in force
- Automobile registrations (ownership/registration certificate)
- keep it as long as you own your vehicle
- if annual registration is required, keep only the 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
- dirty records
- Marriage certificate
- Medical records
- Immunization records for children.
- military service records
- Pension Plan Records
- Receipts for major home improvements/renovations
- Receipts for major purchases that have a long life expectancy (refrigerator, stove, freezer, vehicles)
- religious records
- School/educational records
- tax returns
- In the US, the IRS has 3 years from the date you file your tax return to review your return for errors and up to 6 years to audit your return if it suspects you have underreported your gross income. 25% or more. There is no statute of limitations on an audit when deliberate fraud is suspected.
- In Canada, the CRA advises you to keep your tax returns, assessment notices, and all supporting documentation for 6 years from the filing date of your personal income tax return.
- NOTE ~ I recommend keeping them indefinitely because they take up little space and can often be a valuable resource if there are any disputes over things like paying income taxes, child support/alimony paid or received, and plan benefits of pensions.
- Will and/or Power of Attorney
- must be kept securely in a fireproof safe or a lockbox 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 boxes to store information you need to keep long-term or indefinitely.
And one final caution: When you decide you no longer need to keep certain documents, be sure to 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 possibility of identity theft which could lead to bigger headaches than you can imagine.