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What financial records should I save?

Pile of financial records

Pretty soon you'll probably have last month's grocery receipts mingled in with your insurance policies and your birth certificate cohabiting with old ATM receipts. Many people know that keeping their records under control can save time, energy and headaches, but don't know where to begin.

To turn good intentions into great record keeping, consider observing the following expiration dates for your documents. And remember protect your financial information by shredding what you decide to discard.

Documents with expiration dates

Canceled checks

If your checking account is at DCU, you don't have this nuisance. Instead of canceled checks to fill up the box in your closet or under your bed, we provide on-line front and back check images. They're available within five days of clearing and we store up at least a year's worth for you. Print out only the ones you need.

If you need copies going further back, particularly for a legal problem or IRS audit, we can get you copies as far back as you need them.

But if you should still have a checking account elsewhere, hang on to canceled checks for one year, and then consider discarding all those you won't need for tax, warranty, or insurance purposes.

Credit card, Debit card, and ATM receipts

Save these receipts to check the transactions against your monthly statements. If any purchases have warranties, attach the receipt to the warranty information in case you need proof of purchase. Save receipts for gift items (or anything else you may need to return to the store). Save receipts for items to prove value for your insurance or taxes.

Tax documentation

Supporting tax documentation, such as receipts, W-2s, 1099s, canceled checks and credit card statements can generally be thrown out seven years after the return's due date. In some special circumstances, however, you may need to hold on to tax documentation longer.* (The IRS has seven years, for example, to challenge your return if you are suspected of under reporting your income by 25 percent or more.)

Keep copies of your actual tax returns permanently.

House-related documents

Keep canceled checks and invoices for any permanent home improvements until you sell your house; you may be able to reduce your taxable capital gains if any. Then, save papers that support the profit you realize on the house sale for three years after the tax year in which the house is sold, especially if you defer tax liability by rolling over any gain into another home.

If you have a home office, hold on to your phone or utility bills if you are planning to deduct a portion on your taxes. When you sell your house these old bills can give potential home buyers an idea of how much they might pay each month.

Savings and investment records

Keep records of the purchase and sale of mutual funds and stocks until you've reported the transactions to the IRS, and then keep the records with your other tax-related documents. The IRS has stringent rules on reporting capital gains and losses.* You may also want to keep the most recent cumulative reports for each security. Save quarterly reports from all retirement plans until you get an annual summary. Keep all annual summaries until you close the account.

Automobile papers

Finally, store car maintenance records until you sell the car, at which time you should give them to the new owner. Keep the purchase order and title for as long as you own the vehicle.

Keep these documents indefinitely

Some documents should be kept permanently. We can provide safe deposit boxes at two DCU locations, or you can acquire a fireproof home safe to help ensure their safety. DCU also offers Online File Storage for those electronic documents you want to keep safe.

  • birth certificates
  • college transcripts
  • credit card agreements
  • diplomas
  • divorce decree and property agreements
  • home inventory
  • insurance policies
  • loan agreements
  • marriage certificate
  • passport (current)
  • pension-plan and retirement-plan documents
  • receipts for major purchases
  • Social Security cards
  • stock purchase agreements
  • tax returns
  • warranties (until they expire)
  • work performance reviews and memos on job performance
  • year-end pay stubs and bonus statements

For more information on keeping your financial records in order, check out Beth Kopliner's book Get A Financial Life. And remember, with everything from direct deposit to automatic withdrawals to Online File Storage, we have the tools to help you send clutter packing!

* Consult your tax adviser for more information.