With all the financial documents arriving in the mail every week, it doesn’t take long to start a paper trail. You don’t want to ignore the bank and credit card statements, bills, and correspondence you receive. This is how you miss an important deadline.
You don’t want to keep everything either. This is how you end up with too much of a mess. But which records should you keep and which ones can you get rid of?
Stop wondering how long to keep bank statements and other important documents. Here is a guide to help you decide what to do.
How long should I keep old bank statements?
Keeping track of the documents that enter your home can become overwhelming if you don’t know what to do with everything. The retention date for bank statements and other financial documents depends on the document and how you use it.
Bank and credit card statements
Keep records of all your bank accounts and credit cards for at least a year. If you go paperless, you should be able to access these records from the bank, but it doesn’t hurt to keep a digital copy of your statements in a secure place.
Banks are required by federal law to keep records for five years. Check with your bank for more details on how to access your old statements.
How long to keep bank statements for the IRS
The Internal Revenue Service has between three and seven years to audit you if it suspects you’ve made a mistake on your tax return. To be on the safe side, keep a copy of your tax return for at least seven years. You should also keep tax supporting documents such as bank statements during this period. This includes the following records:
- W-2 Forms
- 1099 forms
- Bank and brokerage statements that support your tax return
- Tuition fee payments
- Charitable donations
- Contributions to health savings accounts
- Medical fees
Keep canceled checks for one year, unless you need them for tax purposes. Check them out when you reconcile your accounts each month to see what has been cleared. If your bank doesn’t return your canceled checks, you can request a copy for up to five years.
In most cases, you should keep your bill payment stubs for at least a month before throwing them away. The exception is when you need a copy of the invoice for tax purposes. For example, if you take a utility deduction for your home office, you should keep a copy of the bills for at least three years.
How to properly store or dispose of bank statements
It is not enough to know how long to keep bank statements. You should also know how to keep or properly dispose of bank statements and other financial documents. It is important to protect the personal and financial information printed on the statements.
Here are four options for storing these documents:
When you store documents online – in “the cloud” – they stay on an external server. You can view these documents from any device connected to the Internet. Wherever you are, you have access to your files. This is a convenient option, but problems can arise if the server is hacked or crashes.
In most cases, cloud storage is secure. The servers storing your information are usually located in warehouses with limited access. Businesses monitor their security policies, implement firewalls, and encrypt data to protect it.
Some people like the security of knowing they have hard copies on hand. They are easy to access when you need them. You don’t need internet access to read them. On the other hand, a hard copy is lost forever if you lose it.
Keep hard copies in a fireproof box or filing cabinet. For added security, choose a container that locks so you can keep your papers out of prying eyes.
Safes and safes
Important paper documents should be kept at all times in secure, airtight and fireproof storage containers such as a safe, safe or safe. Replacing these documents can be time consuming and expensive, so it makes sense to protect them. In addition to bank statements, consider putting the following documents in a safe or safe:
- Birth, marriage and death certificates
- College transcripts and diplomas
- Divorce judgments
- Insurance conditions
- Mortgage loan agreements
- Pension and retirement documents
- Social security cards
- Stock agreements
- Income tax returns
You can store copies of your documents on your own hard drive. It can be on a computer or an external hard drive that you can easily access. You can scan or take photos of your paper documents and convert them to digital files to keep as a backup.
If you choose to store your files digitally, place a password on the hard drive. This prevents someone from accessing the files if the hard drive is lost or stolen.
For more security
Consider using a combination of these storage methods. For example, you can scan your important papers and store them on an external hard drive. Keep original paper documents in a safe or safe.
Throw away documents: how long you need to keep invoices before shredding them
When it’s time to get rid of documents, don’t throw them in the trash. Identity thieves may be able to find your sensitive information if you throw away the papers intact.
Instead, invest in a shredder. Use it to destroy junk mail and documents containing your personal information including invoices and bank statements. You can also use it to cut old credit, debit, and ID cards, if your shredder can accommodate plastic.
Document retention: key points to remember
It is important to know which documents to keep and which to throw away. You’ll avoid clutter and have access to the financial information you need when you need it.
When deciding how to store your documents, consider accessibility and security. You should be able to get your documents when you need them and protect them from the wrong hands.
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