Getting rid of documents properly can be key to protecting your personal information online and off. You probably already know that important documents such as tax returns, bank statements and paycheck stubs need special attention, but for how long, and in what format?
And what is the best way to safeguard all that personal data? Your tax returns are important documents to keep as part of your financial history. You can easily access your paperless statements and documents online and keep them safely stored there. Bank of America clients can easily manage paperless statements and documents using Mobile and Online banking.
Depending on your filing circumstances, the IRS may be able to ask you for supporting documentation for three to seven years after you file a return. Knowing that, a good rule of thumb is to save any document that verifies information on your tax return—including Forms W—2 and , bank and brokerage statements, tuition payments and charitable donation receipts—for three to seven years. You should also hold on to pay stubs so that you can use them to verify the accuracy of your Form W-2 when tax season arrives.
Otherwise, you can dispose of them as soon as you verify your payment was processed. You can also dispose of bank withdrawal and deposit slips after verifying them with your monthly statement. For physical documents, designate a safe, out-of-the-way place in your home to store all paper records that protects them from damage or theft. For digital records, be sure to archive and back up all electronic records. Use complex passwords to keep your account information safe.
Make sure your username and password combination is different from the ones you use for personal email, online merchants and social media accounts. Protecting your computer with antivirus software is also a good idea. Invest in a cross-cut shredder that will eliminate all traces of your personal information, or search for free shredding events in your community. Having paperless statements and documents can help reduce the risk of identity theft posed by lost or stolen mail. The material provided on this website is for informational use only and is not intended for financial, tax or investment advice.
Please also note that such material is not updated regularly and that some of the information may not therefore be current. Consult with your own financial professional and tax advisor when making decisions regarding your financial situation. We're here to help. Reach out by visiting our Contact page or schedule an appointment today. We strive to provide you with information about products and services you might find interesting and useful. Sometimes through the year we are unsure what will be relevant or not, so this will be handy to have to keep track.
I have also shared below an idea on how you can keep your tax paperwork, bills and receipts organised throughout the year as keeping everything tidily together to not misplace a receipt, will help you get the most money back at tax time. Many like to put off tax time but you will thank yourself for getting it done sooner rather than later. It is recommended to keep all paperwork related to your tax for up to five years, just in case you ever need to show how you arrived at these figures.
Your accountant should give you a list of all the paperwork they recommend you to consider for your tax return. Available here. The key to making tax time stress free is to keep your paperwork organised throughout the year. This will save you so much time and sanity. There are two options in how to organise your files:.
I chatted to Scotty about the best way to file her paperwork. Use the method that suits you, as this filing system is just for your records. Just in case you were wondering: those warranty records, receipts for big-ticket items like that new TV , and even proof of home repairs? Yup—you should keep those around until the warranty expires, you sell that TV, or move out of your house. That depends.
You really should keep things like titles, deeds, mortgage statements and even insurance policies for as long as you own your property or the life of the loan. Pro tip: Pay off all that old debt and say goodbye for good with Financial Peace. Personal records are things like your birth certificate, marriage certificate, Social Security cards, retirement accounts, life insurance documents, will and powers of attorney.
You need to keep all of these things—forever. You can easily create your will online today. And remember to shred any document with personal information on it before you toss it in the dumpster. You never know who could get their hands on it! Ramsey Solutions has been committed to helping people regain control of their money, build wealth, grow their leadership skills, and enhance their lives through personal development since Millions of people have used our financial advice through 22 books including 12 national bestsellers published by Ramsey Press, as well as two syndicated radio shows and 10 podcasts, which have over 17 million weekly listeners.
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