What Records to Keep and How Long to Keep Them

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Real Estate Agent with Realty Group Referrals 16766
https://activerain.com/droplet/cJM
 

What Records to Keep and How Long to Keep Them

Digging through piles of records can be a frustrating task. It can take only one search to find something to raise the question: "Do I really need to keep all these documents?" While the answer may be "No," one must be careful about discarding old records.

Before you do a complete cleaning and shredding all the documents in your filing cabinet, however, please note that it is important for you to retain certain documents. Shredding old records will help protect you against identity theft, but disposing of too much can leave you unprotected. While there are no firm rules on record retention, the following information can be used as a guide to help you in determining what documents you should keep and how long you should keep them:

ATM Receipts: These should be kept only until you balance your checkbook. After that, shred them.

Bank Statements: You don't need to keep your bank statements. The only exception is if you are applying for a mortgage, and even then you need only a three month history.

Credit Card Statements: These should be kept for only the past three months. Credit card statements merely reflect the charges to your card, and your credit card company can reproduce these reports if you need them.

Financial and Investment Documents: Investments often result in receiving vast amounts of mail, such as prospectuses, privacy notices, and address confirmations. If you don't plan on acting on this information, get rid of it. You need to retain balance statements for only the past three months. Any time you purchase a new investment, however, you should retain the transaction record until you sell the investment and complete your income tax return. In addition, you may want to keep any benefit information if it would be helpful to you in determining your future benefits.

Home Insurance: Retain home insurance documents for a minimum of five years; however, if there is any question that issues may arise in the future, then keep these records for ten years. Insurance companies do keep this information, but you should not rely solely on them to provide it.

Home Repair Bills: The general rule is to keep these records for ten years. This should adequately protect you should litigation or other disputes arise that are connected to the repairs or workmanship. If there is a lien on the property connected with the work or repairs, then make sure to obtain a satisfaction of lien from the contractor and keep that document as long as you own the property.

Life Insurance Policies: Life insurance policies should be kept for the duration of the policy, plus an additional three years.

Medical Records: Personal health records, such as medical history, contact information of personal physicians, and prescribed treatments and prescriptions, should be kept indefinitely. All other medical records, however, such as premium statements, physician or hospital bills, copies of prescriptions, only need to be kept for five years after treatment has ended, unless you have claimed items on your tax returns, in which case the supporting documents should be kept for seven years.

Mortgage Documents: You should keep mortgage documents for the duration of the mortgage. Once you have paid off the mortgage, the bank must record a satisfaction of the mortgage. Keep the record of satisfaction as long as you own the property.

Pay Stubs: If your pay stubs contain the history of all the past pay stubs for the year, then you need to keep only the most recent one. If they don't provide payment history, then keep all pay stubs until you receive an overview statement at the end of the year. After you receive the overview statement, you may discard all previous pay stubs. Please note that pay stubs contain all the information an identity thief needs to steal your identity. Therefore, dispose of these cautiously, preferably by shredding them.

Tax Returns: The general rule is to keep tax returns, whether business or personal, for seven years. Thus, when you file a new return, you may shred the one no longer needed. Although the IRS has three years to audit you after you file your income tax return, there are several exceptions to this rule, and it is better to be safe than sorry. Further, it is important to save all the information used in preparing your returns, for it is up to you to provide this information if you are audited or asked related questions.

Utility Bills: You need to keep your utility bills for only the last three months. If you write off on your income tax return anything contained in these records, then you should keep these documents as tax records.

 
 

 
 

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This newsletter is not intended as a substitute for legal counsel. While every precaution has been taken to make this newsletter accurate, we assume no responsibility for errors, omissions, or damages resulting from the use of the information in this newsletter. The Estate Planning & Elder Law Firm, P.C. thanks the law firm of Oast & Hook for their input to this newsletter.

Copyright © 2006-11 by The Estate Planning & Elder Law Firm, P.C.

 

  Blooming for you this summer!

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Roy Kelley and Associates

 

Roy Kelley, Associate Broker

Realty Group Referrals (Retired from RE/MAX Realty Group)

6 Montgomery Village Ave., Suite 200

Gaithersburg, MD 20879

Main Office:  301-258-7757 (You will not reach me at this number)

Send an email message if you need my phone numbers. I will be happy to recommend a real estate professional if you are moving to the area.

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Re-Blogged 3 times:

Re-Blogged By Re-Blogged At
  1. Al Raymondi 06/21/2011 12:38 PM
  2. Wallace S. Gibson, CPM 06/21/2011 12:50 PM
  3. Judi Boad 06/22/2011 04:18 AM
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what records to keep and how long to keep them

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Rainmaker
325,424
Donnie McKinney
Purchase Realty Group - Paducah, KY
Donnie McKinney CCIM, Purchase Realty Group

Good info. I recently walked into my basement and saw a plastic garbage back full of tax records. Um, according to your info I guess I can throw 1981 returns away, now lol

Jun 21, 2011 08:17 AM #1
Rainmaker
1,101,176
Al Raymondi
Ocean View Realty Group in Ormond By The Sea Florida - Ormond Beach, FL
Ormond By The Sea Florida - Home and Condo Sales

Thanks for the recap of record keeping requirements Roy.  Even though spring cleaning time has passed we can still get in there and toss some old stuff we no longer need.

Jun 21, 2011 08:36 AM #2
Rainmaker
1,250,173
Michele Cadogan-Cell 917-861-9166
Fillmore Real Estate 2990 Av U, Bklyn , NY 11229 - Brooklyn, NY
Licensed Real Estate Associate Broker -

 

Great list especially for young people just starting out and new home owners.  Thanks Have a great day.

Jun 21, 2011 08:58 AM #3
Rainmaker
5,458,789
Roy Kelley
Realty Group Referrals - Gaithersburg, MD

Thanks for your comments. Please re-blog this post.

 Blooming for you!

Jun 21, 2011 10:43 AM #4
Rainer
207,845
Judi Boad
ACCURATE REALTY GROUP - Seattle, WA

Hi Roy~ This is great information. Let's me make some space in my file drawer too! I will most certainly re-blog this post tomorrow morning!

 

Jun 21, 2011 11:35 AM #5
Rainmaker
1,238,846
Wallace S. Gibson, CPM
Gibson Management Group, Ltd. - Charlottesville, VA
LandlordWhisperer

What GREAT information, Roy...thank you for this and I'm going to REblog so that this gets more viewings!

Jun 21, 2011 12:46 PM #6
Rainmaker
841,108
Joshua Zargari
MJ Decorators Workshop LI staging and home decorating - Lynbrook, NY
MJ Decorators Workshop

Hi Roy!

Thank you for reminding us...

Jun 21, 2011 01:15 PM #7
Rainmaker
908,989
Kay Van Kampen
RE/MAX Broker, RE/MAX - Springfield, MO
Realtor®, Springfield Mo Real Estate

Great tips Roy.  I'm one that keeps everything for 10 years.  I'm in the process of shredding everything from 1999 back.

Jun 21, 2011 01:39 PM #8
Rainmaker
2,046,510
Patricia Feager, MBA, CRS, GRI,MRP
DFW FINE PROPERTIES - Fort Worth, TX
Selling Homes Changing Lives

Roy,

Thanks for the thoughtful post. I remember working for a company a long time ago and they made me go through a compliance training class for three days to learn how to file and keep records. They were very strict about it and once they trained you, you better never forget. This was a very successful company and they were very serious that everyone went through the training program.

As self-employed business owners, I appreciate your list. It's very helpful.

Patricia

Jun 21, 2011 03:42 PM #9
Rainmaker
568,360
Linda D. Pufford
Stage with Divine Style - Home Staging - Novato, CA
ASPM, Marin/Sonoma Home Stager

Hi Roy,

This is great information and very valuable too!  I have bookmarked to later re-blog.  Thanks so much for these helpful tips...  it is great advice for everyone!!!

Jun 21, 2011 04:40 PM #10
Rainmaker
5,458,789
Roy Kelley
Realty Group Referrals - Gaithersburg, MD

Good morning.  Thanks for your comments and re-blogs.

Jun 21, 2011 11:03 PM #11
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