Organize your files

The key to a stress free tax season is being organized all year round.

How and what to organize for tax time?

• Designate a file cabinet to hold hanging folders for your year round paper storage.
• Create folders for receipts, credit cards, banks statements.
• Put all the documents in one place during the month until the filing day.
• Have one folder designated for currents bills to be paid and one folder for all others documents.
• Once a month file everything from the folders into the filing cabinet in the appropriate folder.

Where do you file your papers?

Some of the tax papers you will be filling will include your W2s, 1099s, mortgage, bank and real estate tax statements and receipts for charitable donations. Most of the papers /receipts you will file fall into the following categories: salary, real estate, medical, childcare and investments.

How long should I keep my financial records?

• Throw out now.

• Phone and utility bills. Once they are paid, they are history. If you need to check on an old bill, it can be located through the utility company’s website.

• Save for one year

• Canceled checks, others than those you are saving with your tax records.
• Credit cards statements.
• Store receipts, in case you need to return things on warranty.

• Save for three years

• Keep bank statements if you pay bills online or use them as record of tax deductions.

• Save for seven years

• This is the safest length of time to save your tax returns and related material.

• Save for ownership period

• Home-related documents
• Real estate records
• Property tax
• Warranties
• Titles and deed
• Home improvement receipts and cancelled checks
• Investment related documents
• Buy and sell confirmations.
• Dividend reinvestment records
• Year-end broker age statements
• Mutual fund annual statements
• Investment property purchase documents
• Loans

• Save forever

• Keep these records in a fireproof file cabinet or a deposit box at a bank or financial institution.
• Marriage, birth and death certificate
• Settlement or divorce papers.
• Adoptions, custody and citizenship papers.
• Trusts, living wills and power of attorney.
• US saving bonds.
• Stocks and bond certificates.
• Passports.
• Estate planning documents.
• Medical /health records.
• Motor vehicle title.

Hope a few of these tips give you the confidence to sort through yours papers, organize the ones you keep and confidently dispose of the rest.