How to Organize and Keep Important Documents

Knowing how long to keep your records and setting up a filing system to organize them will save you time and money. Learn what records to keep and how long you need to keep your records.

Instructions

1. Tax Returns. The IRS suggests you save your last six years of tax returns. That is six years from the date that you file. There is no statue of limitations for tax returns that were never filed or that were file fraudulently. Keep all of your tax return files in the same location for easy access.

2. Bank Statements. Your bank statements should be saved for three years. Create a file for your bank statements. Include your canceled checks in this file. Be sure to shred your old bank statements when updating your files.

3. Credit Card Bills. Save your credit card bills for one year. Be sure to shred them when updating your folder.

4. Investments. Save your entire cost basis for the life of your investments. Save any trade confirmations for a couple of years after you sale your investments. Save your IRA nondeductible contributions for proof of tax payment.

5. Medical Records. Save all of your receipts for doctors, prescriptions and medical purchases for six years.

6. Warranties. Keep all of your warranties in one location. Yearly toss out warranties for items that you no longer have.

7. Home Ownership. Save for the entire length of time you own your house plus seven years the real estate papers relating to your house. Save any major improvements receipts, warranties and property tax receipts also.

8. Vital Records. These include your birth certificate, marriage license, divorce papers and passports. They are to be saved permanently. It is best to keep these in your safety deposit box.

Tips & Warnings

• The best time to update your important documents is right after you file your tax return.

• Always shred your old papers that have your name and any account information on.

Resources

• More Articles by Sharon Meier