Things to Throw Away, Things to Keep
By Steve Wedig
Is there something about spring that makes you want to clean out your closets, sort through your drawers, and purge your files? Many of us take advantage of spring cleaning to get rid of things we don’t need. When you get to your files and records, though, you want to be careful. The last thing you want to do is to throw away an important document that you need later. Keep reading to find out which important records you need to keep.
Tax Records
Now that we are past that fateful deadline to file income taxes, you may be tempted to just move on, getting rid of the records that you used to file your taxes. That would be a mistake. In the case of an audit, you will be expected to reproduce the original documentation which your return is based on. It’s a good idea to keep your tax returns and any supporting documentation for at least 7 years. Some tax professionals even recommend that you keep your tax returns indefinitely. Make sure you talk to your tax advisor about your specific situation.
Investment Records
Relatedly, investment records are important to keep in part because they often are a part of your tax documentation. Those records that provide support for your tax filings should be kept with the rest of your tax records. It’s also a good idea to keep records of any purchases or sales since you may need them in the future to calculate capital gains.
Property Records
Property that you own is also an investment of sorts. You should keep any records relating to any property, including your home. Records that show any improvements made should also be kept. Additionally, documents that detail the cost of improvements or that relate to the purchase or sale of property should be kept as well.
Mortgages or Loan Records
Records relating to a mortgage, loan, or debt should be kept at least until the loan is repaid. It is also a good idea to keep documentation showing that the debt has been retired in case you would ever be questioned about it.
Personal Records
Finally, the last category of records that should be kept is personal records, which include birth certificate, marriage license, social security card, and military discharge papers. These can be very important to have when proving your identity or applying for passports, visas, and voter ID cards.
Most experts would agree that the documents mentioned above are important and should be kept. Many other records may be important in certain circumstances but not in others so you need to be aware of what records you might need later. For instance, you might want to keep a receipt for a significant purchase. Otherwise, most receipts and bills can be thrown out after they are paid. This spring, go ahead and purge…but make sure you keep the records you need!
