In most homes, paper is a mess. And it seems to mysteriously multiply by itself. But how long do you need to keep all those receipts, bank and credit card statements, and other financial documents? Here’s a practice. In most homes, paper makes a mess. And it seems to mysteriously multiply by itself. But how long do you need to keep all those receipts, bank and credit card statements, and other financial documents? Below is a helpful reference that you can use to manage your home document record.
Mix after one month
Deposit / withdrawal slips from ATMs and banks
- keep it in a file folder until you receive the monthly statement
- reconcile with your statement to make sure charges and payments have been processed correctly
- for a major warranty purchase, staple the receipt to the owner’s manual and keep it on file for the term of the warranty
- for a major non-warranty purchase, keep your receipt if the replacement cost of the item is more than your home insurance policy deductible
- if it is a minor purchase without warranty, please shred
Cash purchase receipts
- log into your check book or computer software to make sure you are accounting for all your purchases
- If it is a major purchase with a warranty, staple the owner’s manual and keep it on file for the term of the warranty.
- for a major non-warranty purchase, keep your receipt if the replacement cost of the item is more than your home insurance policy deductible
- if it is a minor purchase without warranty, please shred
Credit card receipts
- keep on file until monthly statement is received
- reconcile with your statement to ensure charges and payments have been processed correctly
- If it is a major purchase with a warranty, staple the owner’s manual and keep it on file for the term of the warranty.
- for a major non-warranty purchase, keep your receipt if the replacement cost of the item is more than your home insurance policy deductible
- if it is a minor purchase without warranty, please shred
Mix after one calendar year
- Monthly bank / financial institution statements (unless required for home business)
- Brokerage / Mutual Fund Statements (Monthly / Quarterly)
- reconcile with your annual statement
- Monthly credit card statements
- Credit reports
- you should request your credit report annually to make sure all information is accurate and up-to-date, especially regarding accounts you have closed throughout the year
- Requesting this file annually helps prevent identity theft, so you can see who has requested the report and for what purpose
- Monthly mortgage statements
- reconcile with your annual statement
- Pay stubs
- shred after reconcile with your W-2 or 1099 (US) or T4 (Canada)
- Telephone / utility bills
Store for 7-10 years
- Any T4 form, including T4E, etc. (Canada)
- Annual mortgage statements
- Supporting documentation (canceled checks / receipts / statements) for tax returns including but not limited to:
- donations
- retirement account contributions
- child care receipts
- alimony / child support paid or received
- medical expenses
- mortgage interest
- property tax payments
- Forms W-2 or 1099 (US)
- Credit card year-end statements (if provided)
- Year-end statements from utility companies (if provided)
Hold indefinitely
- Adoption records
- Auto / Home / Life Insurance Policy Information
- Maintain purchase records for as long as the policy is in effect.
- Automobile registrations (certificate of ownership / registration)
- keep for as long as you own your vehicle
- if annual registration is required, keep only current recording paper
- Birth certificates
- Business income tax returns and supporting documentation, if you are self-employed
- Death certificate
- Divorce Agreement / Child Custody Orders
- Investment records that clearly show beneficiary information
- purchase records
- sales records
- Marriage certificate
- Medical records
- Immunization records for children
- Military service records
- Pension plan records
- Receipts for major home improvements / renovations
- Receipts for major purchases that have a long shelf life (refrigerator, stove, freezer, vehicles)
- Religious records
- School / educational records
- Tax returns
- In the US, the IRS has 3 years from the date you file your tax return to examine your return for errors and up to 6 years to audit your return if they suspect that you have not reported your gross income in 25% or more. There is no statute of limitations for an audit when deliberate fraud is suspected.
- In Canada, the CRA advises you to keep your tax returns, appraisal notices, and all supporting documentation for 6 years from the date of filing your personal income tax return.
- NOTE ~ I recommend keeping them indefinitely because they take up little space and can often be a valuable resource if there is a dispute over issues such as income tax paid, child support / alimony paid or received, and pension plan benefits.
- Will and / or power of attorney
- must be kept securely in a safe or fireproof safe at your financial institution
- Year-end investment account summaries
Now what?
Now that you know what to keep, where are you supposed to keep everything?
Set up a simple home filing system to cover the basics, and invest in a couple of sturdy cardboard or plastic filing boxes for information that you need to keep for a long time or indefinitely.
And one final word of caution: When you decide you no longer need to keep certain documents, be sure to shred them and DO NOT throw them away in general trash or recycling. Sensitive financial information or personal information should always be DESTROYED to avoid any chance of identity theft that could lead to greater headaches than you can imagine.
