Storing Household Records

first_imgWhat to keep: You must keep records so you can prepare a complete and accurateincome tax return. The law doesn’t require any special form of records. But keep allreceipts, canceled checks or other proof of payment, Maddux says, and documentationto support any deductions or credits you claim. Where to keep records: “You can save yourself time and money if you gather yourimportant records, track down the ones you’re missing, throw away those you don’tneed and file what’s left in its proper place,” Maddux says. “You don’t have to do thejob in a day or a week. Tackle it a chunk at a time.” “A good time to clean your files is when you prepare your income tax return,” Madduxsays. “Keep items such as tax returns and bank statements.” The tax collector isn’t the only reason you need to keep good records. They can helpyou prove losses after fires or theft. They save you time and money in processinginsurance claims or proving transactions or ownership. They give you a summary ofyour financial situation to help in financial planning, estate plans, net worth statements,investments and retirement plans. “Organized records can mean the difference in financial gain or loss,” she says. “Yourpersonal finances are like a minibusiness. They deserve to be operated efficiently.” “You need to keep track of financial records every day to be ready for tax time,” saysEsther Maddux. A financial management specialist with the University of GeorgiaExtension Service, Maddux knows the value of good record keeping. Current financial records can go in a metal file cabinet, accordion file or cardboardbox. At the end of your record-keeping year, throw away items you don’t need andmove important papers to a permanent file. How long? “Keep your records as long as they are important for the federal law,”Maddux says. “Keep records that support an item of income or a deduction. The periodof limitations varies, so check with a tax expert on length of time.” Keep certain records that are hard or impossible to replace in a safe deposit box or afireproof box at home. That includes items like your car title, birth certificate, marriagecertificate and will. “In a divorce, financial records can establish separate and joint property,” Madduxsays. “They can prove ownership in a lawsuit or a fight over inheritance of property.They can also give your family easy access to information to settle your estate.” It’s not tax time yet. Or is it? Want to know more about record keeping? See a tax consultant, the Internal RevenueService or your county Extension Service agent. You’ll want certain records with you at all times. That includes credit cards, driver’slicense, your insurance card and emergency information.last_img

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