TAXES, FINANCIAL PLANNING, RANDOM THOUGHTS
Documents have a way of stacking up. I don’t like to hang on to paper any longer than I have to. Here is a quick reference guide I recommend for document retention:
- Keep tax returns indefinitely. You only need the supporting documentation for 3-4 years, or the time that the IRS allows for amendments and audits.
- Keep records indefinitely if you do not file a return or if you have a fraudulent return.
Investment, Bank and Credit Card Statements:
- 3 years and stored with your supporting tax documents.
- 7 years for loans that have been paid off.
- Banks are required to keep records of checking and savings accounts for 5 years.
- Home improvements increase the tax basis of your property and are needed when you sell your home. Keep for 3 years after the sale of the home.
- Keep records until the statute of limitations expires for the year in which you dispose of the property. Here is a quick California reference guide: http://www.courts.ca.gov/9618.htm. Ask your attorney if you are not sure.
Estate Planning Documents:
- 7 years after the beneficiaries, the IRS, and the creditors are paid and the estate is fully settled.
A word of caution!
- Never throw away documents with your personal information on them. Invest in a shredder or find a trusted shredding service.
- Keep your documents safe from damage or theft.
- If you are electronically archiving your documents, back them up.
- Only use complex passwords: 9+ characters with upper, lower case, numbers, and at least one symbol. Change your password at least once a year or as soon as you’ve had an incident on your computer.
- Only use cloud storage that has fully encrypted software.
I hope this aids your spring-cleaning efforts. If you have questions, please reach out for more information.
Disclaimer: *Sage Path Solutions does not provide individual tax or legal advice. Clients should review tax and legal questions with their own tax and legal advisors. For more information, please refer to Laurel Wealth Advisors, LLC most recent Form ADV Part 2A which may be found at www.adviserinfo.sec.gov.