Now that tax time is over, you’re probably wondering what to do with all those documents you gathered to file your return. Should you keep them in a folder, scan them on your computer or shred them? It all depends.
“You can't take everything with you,” says Alan Goldfarb, managing director of Financial Strategies Group in Dallas, “but you should safely store or electronically scan and save certain essential documents.”
Also, consider using Mint.com or other services to help keep track of accounts and your finances, says Thomas Balcom, founder of 1650 Wealth Management in Lauderdale-by-the-Sea, Florida.
“You cannot imagine how many times we have clients discover that they have ‘orphan accounts,’” such as forgotten 401(k)s or other accounts with money in them, Balcom says. “You would be shocked at how many times this happens.”
Here’s what to do with 52 different documents—tax related and not.
Keep and scan
These items must be maintained in their original form and either kept permanently or until they need to be replaced, says Cary Carbonaro of United CP in Clermont, Florida. Buy a filing cabinet or storage box that is fireproof, waterproof and secured with a lock. Give an extra key or the combination to your estate executor and/or trustee(s). Scan these items as well in case they are lost, stolen or damaged. In most cases, a scanned copy may help in replacing the original.
- Marriage certificate
- Birth certificate
- Adoption certificate
- Citizenship certificate
- Death certificate
- Veteran’s papers
- Health records
- Current passports
- Driver’s license
- Current legal contracts
- Immunization records
- Medical records
- Vehicle title
- Vehicle proof of tax paid
- Will and trusts
- Living will
- HIPPA authorization
- Medical power of attorney
- Financial power of attorney
- Power of attorney
The following items are not permanently kept—they may expire or be updated—but you may still need quick access to them. Carbonaro suggests using an expandable folder with organizational tabs, so you can easily replace these items when they expire or no longer needed. They too, can be left in the filing cabinet or storage box.
- Annuity contracts
- Property insurance policies
- Auto insurance policies
- Health insurance policies
- Life and disability insurance policies
- Medical insurance cards or Medicare cards
- List of all financial accounts
- List of digital assets (such as photo storage, cloud storage, airline miles, social media accounts and email)
- List of information on credit cards (in case they get lost)
Buy a scanner and go digital. Store scanned documents online in a cloud where you can access it from anywhere. Make sure to back up the information regularly and secure the information with a strong password.
“If you scan and shred anything, you also need a reputable and reliable electronic backup. There are many cloud services as well as automatic backup services,” says Allan Katz, president of Comprehensive Wealth Management Group in Staten Island, New York. “They are not expensive and can retrieve data quickly.”
It’s also a good idea to keep a copy of the virtual documents on a USB stick (thumb drive) in your filing cabinet or storage box.
- Year-end statement for mortgage loan
- Annual student loan statements
- Annual investment account statements
- Annual retirement plan statements
- Pet records
- Receipts for large purchases (jewelry, appliances, antiques, computers – these can be used to document replacement value for insurers after theft or natural disaster)
- A list, photo log and/video of possessions in your home for insurance purposes
- Annual pension statements
- Vehicle repair receipts (if you plan to sell it later)
- Tax returns and supporting documents (for 7 years)
- Annual Social Security benefits statement
- Career files such as resumes, transcripts, review, license numbers and unemployment claims
- Receipts/records for any major home repairs/renovations (can be used for tax write-offs)
- Warranties and instructions for appliances, electronics and child equipment
“We receive an overwhelming amount of mail, either online or physically delivered, that we hang on to because we’re unsure if we will ever need it or not,” says Carbonaro. “Purging your records can provide a tremendous sense of relief and reinforce a sense of control over your finances.” Here’s a shortlist of what you can shred.
- Bank statements (unless the statement is documentation for a tax deduction, then file with tax returns)
- Credit card statements (unless the statement is documentation for a tax deduction, then file with tax returns)
- Monthly mortgage loan statements
- Monthly student loan statement
- Utility, cable or phone statements
- Medical bills or statements (unless the statement is documentation for a tax deduction, then file with tax returns)
- Trade confirmations
- Print and keep this list with your stored documents. It’s a good checklist of what you have and where you have it.