Helpful Tips

Cull Paper Records to Fight Overflow

Even if your file cabinets aren’t overflowing, chances are you’re saving more than you need. Here are some tips on fighting document overflow:

State and federal income tax returns. Keep them indefinitely. Please refer to your tax agent for specific retention guidelines.

Canceled checks. Checks for home improvement projects should be saved as long as you own your home. Canceled checks for charitable contributions and other deductible expenses should be saved as long as you save your tax returns. Keep checks for expensive purchases, such as jewelry, appliances or antiques, as long as you own the items. If they are stolen or a warranty dispute arises, you can use the checks as proof of purchase.

Bank statements. Keep bank statements until the end of the year. Unless related for business or tax purposes.

Credit card bills. In most cases, you don’t need to save them longer than a month. When you receive a bill, it usually indicates whether your previous payment was received. If that information is correct, you don’t need to save the previous month’s bill. Exceptions: bills that document deductible expenses, such as home improvement purchases, and bills for other major purchases – such as appliances and jewelry. If you can’t find the sales slip; your credit card bill will provide proof.

Pay stubs. Keep them until you get your year-end W2 form. Keep your final pay stub each year indefinitely, to give you a handy record of your earnings and deductions.

Home mortgage information. Keep a copy of your mortgage in a safe place as long as you own your home. Mortgage bills, like credit card bills, can be discarded as soon as you get confirmation your payment has been received. Most mortgage companies provide a year-end summary. Keep it as long as you own your home.

Stock records. Save buy and sell confirmation records as long as you own the stock. You’ll need them to figure how much you own in capital gains when you sell the stock. Also save monthly statements showing reinvested dividends, stock splits and other changes in your investment. You can discard monthly statements if you get a year-end summary statement.

Mutual fund statements. The rules are the same as for stocks. If your mutual fund statements are cumulative, discard last moth’s statement as soon as you get the current month’s report. Keep year end statement indefinitely. For both mutual funds and stocks, discard all but the most recent shareholder reports.

Items to be kept safely.

Some documents are too valuable to stash in a filing cabinet or kitchen drawer. They belong in a home safe or a bank safe deposit box. Among them:

  • Birth certificates.
  • Citizenship papers and passports.
  • Deeds to property; mortgage notes.
  • Marriage licenses and divorce decrees.
  • Military discharge records.
  • Social Security cards.
  • Stock certificates, if your broker doesn’t’ keep them for you.
  • Automobile titles.
  • Wills and trusts.
  • Powers of attorney.

(Make sure the executor and/or your attorney has a copy of your wills and trusts and powers of attorney.)