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varthalon
2009-10-28, 10:29 AM
So this started with me writing a reply for another thread but I got kind of involved in it and went far a field it didn't really apply there anymore so I thought I'd make a seperate thread for it. Feel free to make additions, observations, and comments.

So what type of records should you be keeping and for how long?

Medical, Tax, Titles, Bank records, etc you should have and keep for quite awhile. Why keep all these records? Tax audits, estate settlements, insurance claims, police reports (theft), claiming benefits, lawsuits, and personal financial planning (many people are trying to cut expenses during the recession: wouldn't it be nice if you already had a record of where you spend it all?) I work in taxes myself and its horrible to watch when someone is audited and they probably don't really owe the money the audit has calculated but they can't prove it.


Vital Records
Birth, marriage, Social Security Card, death certificates. Divorce, adoption, custody papers. Citizenship papers. Military papers (active duty orders, DD214, etc). Wills/living wills.
Vital Records should be kept forever, preferably with duplicates stored as a second location (safe deposit box or with a family member who doesn't live with you)

Tax Records
By law the IRS can audit you for three years, or up to six years if they suspect your reported income was off by 20% or more, or at any time if they suspect fraudulent activity.
All records used to create your return (receipts, etc) should be kept seven years. The returns themselves and your income documents (W2s, 1099s, K-1s, etc) should be kept permanently

School Records
Diplomas and Transcripts should be kept forever

Medical Records
You have a right to your medical records. Get a copy and keep it forever, update it as needed. It is important for you to see what your doctors are writing about you as well as what they are saying to you. It could also be important to have access to your records when you don't have access to your regular doctor (this one potentially saved my life once, I was in an accident, my doctor was unavailable and I have a serious allergy to certain general anesthetics and they couldn't find my records in the system). You should keep an additional, separate record of your immunizations. I keep mine with my passport and other travel documents.

Travel Documents
I love to travel but it can go horribly wrong if your unlucky and/or unprepared. When traveling make sure to have on your person: your Passport, Immunization records, Entry Visas, and a record of where all of your nations Embassy and Consulates in the region are located. Additionally, make sure that a family member who is not travelling with you has a copy of of all your travel documents, itinerary, and contact information. I also scan a copy of everything and E-mail it to myself. I haven't had to use it yet but I've heard it can greatly assist in straitening things out if you lose your originals (you can log into your e-mail address and pull up images of everything and their identification numbers for officials to use as a reference for rebuilding things). As a side note: review the CIA world factbook and the State department's Current Travel Warnings for any region you are traveling to. Also, remember to check in with your embassy and consulates when you enter/leave an area, especially if you are going to be there for more than a month.

Real Property
Real property records (titles, deeds, abstracts, covenants, easements, insurance, mortgages, liens, property tax assessments, repair/maintenance, improvements, etc) should be kept for the length of ownership (+7 years if the sale of the property had income tax impact)

Automobile
Title, registration, proof of insurance, taxes, maintenance/repair, etc) should be kept for the length of ownership. Duplicate copies should be kept separate from the vehicle. When you sell the car the sale documents should be kept for seven years (both for taxes and in case you ever have to prove you don't own the vehicle anymore). Keeping records of your maintenance of the car (showing regular oil changes on up) can often help in selling the car). You may also want to keep fuel receipts, if your doing so for tax purposes keep them for seven years, if your doing so to track your expenses they for as long as you desire.

Personal Property
Look around, what is in your home or on your person that, if you were robbed or if there was a fire you would need documentation to prove it existed for the police report and/or insurance claim. Jewelry, artwork, appliances, electronics, etc. Make a list, including its value and with a copy of the bill of sale or cancelled payment. Keep list forever, updating as you make major purchases and/or get rid of other possessions. Keep a copy of the list at a remote location.

Bank & Credit card statements
Keep bank statements for a year or seven years if it contains records that may be important to your taxes. Keep copies of cancelled checks or statements showing payment for major purchases, taxes, mortgages, and other important things forever.

Investment Recorrds
Stocks, bonds, savings certificates, IRA/retirement contributions, and other securities. Keep as long as you own them plus seven years.

Bills and Household expenses
Keep for seven years if you itemize your taxes, otherwise keep for 1-3 years. Very useful when trying to figure out where all your paycheck goes when you've decided to cut your budget.

Business Records
If you own or run a business then business records are a whole other thing and critically vital to running your business. I can't cover all of it here and STRONGLY recommend you find out exactly what your must keep, should keep, and don't need to keep and for how long. Typically though business records must allow you, your partner/investors, and complete strangers (auditors, etc) to see the five Ws of your running the business: Who, What, When, Where, and Why regarding every transaction. Your records have to might include: invoices, cash register tapes, bank deposit slips, receipt books, credit card slips, 1099s, cancelled checks, accounting statements, petty cash records, proof of purchases, proof of sales, employee records, taxes, inventory, AR/AP, and on and on. If you don't know the ins and outs of business records and are running a business then find a competent CPA to work with you and even then LEARN the ropes, don't rely on your CPA entirely or you'll be sunk if you ever lose the crutch.




So how do you manage all this? Its a huge amount of paperwork! Actually it shouldn't be to bad (except for running a business and actually preparying your tax returns). There are lots of systems out there and just find one that works for you. I've seen everything from meticulous files to junk drawers of receipts and bills. Remember: accordion files are your friend!

Some suggestions though on how I do it:
I keep an electronic file, a permanent paper file, and some other backups, additionally, I have a junk drawer where I throw everything. Over the course of the year I toss most bills, receipts, statements, and the like into the junk drawer. Once a year, one month before my birthday I take 1-2 days off work and run all those annual/semiannual tasks like getting my car inspected, preparing my tax returns, changing the batteries in my smoke detectors, getting a physical with my doctor, going to the dentist... and emptying out the junk drawer.

When emptying the junk drawer, I sort everything into the categories above, make sure its important, and then scan it into my computer. I make 2 CDs of the scanned images and then print everything out so they are all on nice and uniform 8.5x11 pages which I hole punch and store in a set of three ring binders, with tabs for each category.

One CD goes into my closet with the binders, the other CD goes to a lockbox in my parent's basement. For security, I then delete the scanned images from my hard drive and I shred all the originals (confetti shredder, and I throw the confetti out over the course of two separate trash days - these are my most private documents and I've seen to many shows with people painstakely piecing shredded back together :smalltongue: )

Fortunately I've only had a few minor issues where I've actually had to go looking through my records for something. But, while its a bother to deal with one 1-2 days a year it give me a lot of piece of mind the rest of the year.

RS14
2009-10-28, 10:36 AM
One CD goes into my closet with the binders, the other CD goes to a lockbox in my parent's basement. For security, I then delete the scanned images from my hard drive and I shred all the originals (confetti shredder, and I throw the confetti out over the course of two separate trash days - these are my most private documents and I've seen to many shows with people painstakely piecing shredded back together :smalltongue: )

Note that you really want to use a utility such as gnu shred to remove the files from your drive; don't just assume they will unrecoverable when deleted.