Since we have all been at home for months and doing things around the home, I thought I would rerun this appropriate newsletter about what you need to keep and toss for your financial records.
Here is what you can get rid of:
Paystubs – Do you have a stack of them? You can get rid of last year’s because you have a W-2 that summarizes what you’ve earned. Keep the W-2. Make sure they match before shredding.
Bank Statements – If your bank gives you an annual summary or statement, then you can get rid of all the monthly or quarterly statements, but keep the annual summary / statement.
Tax Returns – Generally, you can get rid of tax returns that are seven years old or more (2013 and older) along with the supporting documentation. However, you will want to check with your tax preparer if you:
- bought, sold, and/or own a home
- hold certain investments
- received certain gifts
- have any other special circumstance that requires you to keep related paperwork indefinitely.
In other words, check with your tax preparer before shredding your returns.
An alternative to paper files
Keeping your records on your computer is a great alternative to paper files. We had a lot of paper clutter hanging around, so I started the process of scanning my records as pdfs. If you need a piece of documentation, it’s much easier to locate and open a single pdf than it is to search through a big, cluttered file full of paper. The best part is, that you don’t have to refile the pdf after you’re done looking at it. It’s also easier to fax or email a pdf if needed. Think of all the times you’ve needed to share information about insurances, taxes or rebates. Computer files are great to work with. Remember to keep a back up of your files. You wouldn’t want to lose them if your computer crashes.
Make sure to shred
Remember when I say “get rid of”, I mean for you to shred each and every document that has your personal information on it before throwing it away. You don’t want to offer dumpster divers an opportunity to steal your identity.
Call your tax preparer to see what you need to keep and start to go through your paperwork to eliminate what you don’t need. Happy Shredding!