Toss or Save a Financial Record

March 07, 2013
You’ve been working on getting your financial information together for your tax return. All those papers have bubbled to the top! Which ones should you keep? Good question.

The Federal Deposit Insurance Corporation (FDIC) says it can’t tell you when it is safe to throw away financial documents. They do say to keep the information as long as the IRS can assess you additional taxes. Right now, that is approximately seven years. Laws change. Always check with your CPA for the latest laws.

Credit Card Statements:  FDIC says to save the statements for one year, unless they have tax significance. I save mine for years if I have purchased a big item. If there is a fire or other disaster that affects my personal property, I can prove to the insurance company and/or the IRS that I did have the item and how much it was worth at time of purchase.

Bank Account Statements:  Check with your financial institution and determine how far back they keep statements available to you.

Canceled Checks:  Again if purchases are tax related, keep canceled checks seven years. If they are related to your house purchase, renovations or big items that you purchased, I keep the canceled checks in a file just for those things --- and keep them indefinitely. If I sell the house, I will keep them seven years longer.

Banks are required to keep copies of checks for seven years.

Deposit, ATM, credit card and debit card receipts:  FDIC reminds us to save them until the transaction appears on a statement and you know the amount is correct. If it is for a big item and it has a warranty, save the receipt at least until the warranty is up. Remember, you might want to save it longer for insurance and/or IRS reasons, if there is a disaster.

Electronic Records:  Make sure you back up your data. Technology is always changing. Make sure you are using a method that allows the information to be retrieved.

Use the method of filing important papers that works for you and keeps everything organized and safe. What techniques do you use to keep your important papers at your finger tips, if you need important information?