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how to organize financial records


How long should you keep financial records? How should you organize financial paperwork at home? Why keep financial records at all?  

Well, there's the little consideration of being prepared for tax time, for starters. Especially with the GOP tax plan for 2017 looming over us. If the Internal Revenue Service has a question about an item on your tax return, keeping tax records will leave you prepared to answer it.

Here's how to organize your personal financial documents to help make quick work of tax time - and beyond.

Create a Cheat Sheet for Your Personal Financial Documents

A financial records cheat sheet is your guide to all your personal financial documents, advisers, the location of safe deposit box key, and other financial planning information.

It should include copies of what's in the safe deposit box, and what to do - and who to contact first - in case of emergency.

If anything happens to you, this financial data can help surviving family members through the first few days.

Store Important Financial Records in a Fireproof Home Safe

Anything extremely important that would be very difficult to replace goes in your safe deposit box or an at-home fireproof strongbox.

Usually this list includes titles; birth, death, and marriage certificates; copies of wills and deeds; inventory of household goods for insurance purposes; and passports.

Bank and Credit Card Statement Folders

Easy, right?

Create an Estate Financial Planning Folder

Even if you're just planning to plan your estate, create and label an estate financial planning folder so you've got a place to file the information in the future.

How to Organize Bills

Title your individual bill folders so that you can get what you need, fast. I name files in a way that makes sense to me and would (hopefully) to anyone else on the prowl for them.

For example, although our gas bill payment goes to "Southern California Gas Company," I file the gas bills under "G" in a file tagged "Gas Company" instead of under "S" for "Southern".

Create a List of Credit Card Numbers

Compile a full list of the names and numbers of each credit card in the family. (This includes bank card numbers.) Include the toll-free numbers for reporting loss or theft of said cards.


Create Family Financial Planning Investment Folders

In these family financial planning folders, store information on stocks, bonds, and mutual funds. Your records should show the purchase price, sales price, and commissions. They may also show any reinvested dividends, stock splits and dividends, load charges, and original issue discount.

Create a Life Insurance Policies Folder

Store life insurance papers here, or you can put these important papers in your safe deposit box or strongbox.

Loan and Mortgage Folder

File these papers by bank or lending institution or simply under "Home Mortgage". Be sure to include all financial reporting documents received.

Create a Major Expenditure Receipts Folder

You'll want to put the purchase information for your new Sub Zero fridge and other expensive belongings here.

Pay Stub Folder or Envelope

Each pay period, stash your stub.

Create a Tax Records Folder

Keeping tax records up to date and accurate is essential. Anything you'll definitely be using on your income tax return should go here. 

Create a Work Benefits Folder

Just in care you're having trouble sleeping some night and are desperate for something to read, put all those work benefits documents here.

How Long to Keep Tax Records

When it comes to financial records and receipts, deciding what receipts to keep for taxes is easy - keep all those that show income or deductible expenses for three years. 

This is because the Internal Revenue Service (IRS) has a three-year statute of limitations on auditing a return. Keep all records of income or deduction expense for three years. You'll also want to keep records that show the original cost or value of your property.

Also keep a record of home improvement costs to offset and/or reduce capital gains tax if your home, land, or property is ever sold for more than its original cost or value. 









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