Maintaining a sound financial life also means taking steps to help protect your important records. Was tax season a paperwork mess for you? Have you struggled with finding important documents when you need them? Below are three questions to consider as you prepare your organization system for tax and legal documents for the upcoming year and beyond:
1. What records should you keep?
You’ll want to consider storing any documents that serve as proof of important financial and legal details in your life. These documents can include tax returns, investment records, and mortgage documents. You may also want to keep simpler paperwork, like pay stubs and receipts, for home improvement or business-related purchases.
2. How can you store them?
You have a variety of ways to store important documents, including:
- Paper based: Store printed files in a cabinet; however, this method offers no back-up system for destroyed or damaged files.
- Computer based: Digitize documents to keep on your computer. Consider backing up files and hosting them offsite.
- Cloud computing: Store files online, which can give you access to them from anywhere, while reducing the risk of lost data.
3. How long should you store them?
The types of documents you’re saving can help determine the amount of time you should keep them. The following timelines may be helpful:
- 1 year or less: Receipts from credit cards, ATMs, and bank deposits; insurance policies (until new paperwork arrives); investment statements
- 1 year or longer: Loan documents (until you pay said loans off), investment purchase confirmations (until you sell them), car titles (until you sell the vehicle)
- 7 years: Tax paperwork and supporting documents
- Forever: Marriage certificates, divorce papers, birth and death certificates, estate documents, military discharge papers
Your personal situation will determine how to best store your records. Consult your legal and tax professionals for guidance on your unique needs. And if you have questions about your financial records, we’re happy to help!
Please remember that different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product made reference to directly or indirectly in this content, will be profitable, equal any corresponding indicated historical performance level(s), or be suitable for you or your portfolio. Due to various factors, including changing market conditions, the content may no longer be reflective of current opinions or positions. Moreover, you should not assume that any discussion or information contained in this newsletter (article) serves as the receipt of, or as a substitute for, personalized investment advice from Searcy Financial Services, Inc.
The content of this letter does not constitute a tax or legal opinion. Always consult with a competent professional service provider for advice on tax or legal matters specific to your situation. To the extent that a reader has any questions regarding the applicability of any specific issue discussed in this content, he/she is encouraged to consult with the professional advisor of his/her choosing.
Published for the blog on June 27, 2019 by Searcy Financial Services, your Overland Park, Kansas Fee-Only Financial Planner and Investment Manager.