Should It Stay or Should It Go? A Guide to Your Personal Documents

Should It Stay or Should It Go? A Guide to Your Personal Documents

by Jane Haskins, Esq., January 2019

It's January, when thoughts naturally turn to organizing and decluttering. The folks on HGTV might have you believe it's just a matter of buying the right baskets and containers, yet you never see them doing the tough job of sorting through piles of household paperwork.

Do you really need to keep that receipt from Target? What about those old medical files? Can you throw out your car loan documents? It's paralyzing to think about, and all too easy to avoid. But those unsorted documents add clutter and stress and can cause you to waste time looking for important papers when you need them.

Sorting and organizing documents is much easier if you know what you need to keep, and what can go. Here's a guide to the key types of personal documents.

Tax Returns and Supporting Receipts

The IRS has different recordkeeping requirements for different situations.

To play it safe, keep tax returns, along with any receipts or documents that support your income, deductions, or credits, for seven years. This includes bank and credit card statements, receipts, investment statements, and W-2 forms. Keep these documents in a paper or digital file along with a copy of the tax return.

It's a good idea to keep the tax returns themselves permanently.

Other Types of Personal Papers

For paperwork that is not used in tax preparation, follow these guidelines:

  • Appraisals. Keep appraisals for antiques, jewelry, art, collections, and other valuable items until you receive an updated appraisal, or until you no longer own the item.
  • Auto documents. Keep car titles for as long as you own the car, and loan documents until the vehicle is paid off. Keep insurance policies and registration certificates until you receive new ones.
  • Bank statements and receipts. If you still receive paper statements, consider switching to electronic statements to cut down on paper. Otherwise, keep statements for a year. Keep ATM and other bank receipts until you have reconciled them with a statement.
  • Credit card statements and receipts. In general, keep receipts until you reconcile them with your statement, and keep statements for a year.
  • Divorce and custody papers. Keep divorce decrees and custody and support orders permanently.
  • Estate planning documents.Keep wills, powers of attorney, trusts and advance directives (living wills) permanently, or until you have a new set of estate planning documents prepared.
  • Health insurance documents. Consider signing up for online access to your insurer's statements of benefits for services provided; otherwise, keep the paper statements for a year. Keep insurance cards and general information about your plan until you receive new ones.
  • Home improvement receipts. Save receipts for all home improvement and remodeling projects for the entire time you own your home.
  • Home ownership and sale documents. Keep deeds, inspection reports, and settlement statements from a home purchase or refinance for as long as you own the home. Keep mortgages until they are paid off.
  • Insurance policies. Keep life, homeowners, and other insurance policies until new ones arrive.
  • Investment statements. Keep these while you still own the investment and, for tax purposes, keep them for seven years after you sell the investment.
  • Medical records. Keep medical records indefinitely.
  • Military discharge records. Keep these permanently.
  • Pension plan documents. Keep these permanently.
  • Receipts for appliances, technology, and major purchases. Keep these for at least as long as the warranty is in effect. Keep receipts indefinitely for expensive items that might be hard to place a value on if you had to make an insurance claim or decided to sell the item in the future.
  • Social Security cards and statements. Keep Social Security cards permanently. Keep statements until you receive a new one.

Keep important papers like birth certificates, wills, deeds, titles, insurance policies, and Social Security cards in a safe deposit box or fireproof box that you'll be able to access quickly in an emergency. And set up a simple filing system to keep everything else in its place.

When you dispose of documents, shred anything that contains sensitive information such as bank account, credit card, or Social Security numbers.

Finally, consider making a digital backup copy of everything you plan to keep for more than a year. Knowing that your documents are secure and in the right place can help you get the new year off to an organized start.

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