 | Mark Kolarik is the President of the Kansas Teachers Community Credit Union, located in Pittsburg, KS, since 10-2002 and is a board member of the Kansas Corporate Credit Union located in Wichita, KS . He has been employed in the financial service industry for the last 31 years, having worked in several credit unions for 21years and 10 years in the banking industry. He holds a Bachelor of Business Administration degree from the University of Wisconsin-LaCrosse and is a Certificated Credit Union Executive. |
Banking & Finance
2012-08-02 11:41:19
What is the best way to store records?
Q- I have many records, financial statements, and bills every month. Can you tell me how long I need to keep these records?
A- The typical family receives 5 to 10 important items relating to school, finances, social events, or work. That equates to 50 items a week or 2,500 items a year (according to the Consumer Federation of America). Before you send all your documents through a paper shredder or file them in your pile of bills, know what to keep and what to throw away. The following is a list of records you should keep and for how long.
? Credit Card Receipts and Statements – Keep receipts until your monthly statement arrives. I f the receipts match the statement, shred the receipts. Keep your statements for seven years if they contain tax related expenses.
? Pay Check Stubs – Make sure your pay check stubs matches your annual W-2, then shred the stubs.
? Retirement and Savings Plan Statements – Keep quarterly statements until you receive your annual summary, if everything is correct on the annual summary, shred the quarterlies. Hold the annual statements until you retire or close the account. Keep important notices and contracts for retirement plans and pensions permanently.
? Checking Account Records – At the end of the year, go through your checking statements and only keep those related to taxes, business expenses, and housing or mortgage payments.
? Bills – Keep bills for major purchases (car, jewelry, furniture, computers, etc.) to show proof of their value in the event of loss or damage. For other bills, once you know payment has cleared your bank account, and the return/refund period has expired, shred that bill.
? House Records – Keep purchase price information and the cost of permanent improvements to your property. Also, if you buy or sell property, keep records of legal fees and your real estate agent’s commission for six years after you sell your house.
? Tax Records – The IRS has three years to audit your return, and you have three years to file and amended return to claim a refund if you make a mistake. If you made the mistake of underreporting your gross income by 25% or more on a return, the IRS has six years to challenge it. If you filed a fraudulent return or didn’t file one at all, the IRS can catch you on it any time. Keep a copy of all 1040 tax forms permanently.
? IRA Contributions – Keep nondeductible contribution records permanently in case you need to prove you paid tax on the money when you want to withdraw it.
? Miscellaneous – Also keep permanently; updated household inventory, birth and death certificates, marriage licenses, divorce papers, military records, insurance claims, accident reports and claims, proof of ownership and major debt repayments, and legal correspondence.
Store anything you need to keep permanently in either a fireproof storage box or safe deposit box.
