By: Carole L. Chiamp
People often call me to ask how
long they need to keep copies of tax returns or a copy of their divorce
judgment. So I decided to prepare a list of documents that should be kept.
Turns out that you need to keep more than you think.
Here are some documents you may
want to consider and the length of time to keep them.
1.
Tax returns and supporting documents: Keep them for
three (3) years.
2.
Deductible expenses such as charitable expenses: You
need not keep originals. They can be scanned in and copied. Cancelled checks or
credit card statements will suffice. Check IRS Publication 526 for additional
information. Your bank keeps records of checks, credit and debit information
for seven (7) years.
3.
Taxable brokerage accounts: You must be able to show
what you paid for a stock or mutual fund in order to calculate gains or losses
later. As of 2011, brokerage firms began keeping the records for you.
4.
Major insurance policies: Keep indefinitely.
5.
Home Personal Property Inventory: In case property is stolen or damaged,
insurers may pay upon proof of loss. Photos
are most helpful. Keep indefinitely.
6.
Agreements for all major loans such as mortgages,
mortgage payoff letter, child support, alimony/spousal support payment records,
divorce judgment documentation: Keep
indefinitely.
7.
Birth certifications, social security cards, military
discharge papers: Keep indefinitely.
8.
Estate planning documents, beneficiary assignments for
insurance policies or investment accounts:
Keep indefinitely.
9.
Appraisals for owned property: Keep indefinitely.
A good way to accomplish keeping
documents you need is to shred those you don’t need on a periodic basis. It can
even be fun. Imagine going through old documents and finding grade school
photos of you and your friends.