Important Documents

How Long Do We Have To Save Important Documents

By Rosalie Kramm

 I was reading a great article put out by Consumer Reports on March 8 about how long and why certain documents need to be kept and thought it would be beneficial to court reporters, attorneys, and really all legal professionals. It is suggested that you categorize your documents in four ways: Papers you need to keep for a calendar year or less; papers you can destroy when you no longer own the item; tax records; and papers you need indefinitely.

Category 1– papers to keep for the current calendar year (or less):
1. ATM, credit card, and bank deposit records – reconcile with monthly statement and then shred.
2. Keep insurance policies and investment statements until new ones arrive.

Category 2 – Papers to keep for a year or more:
1. Keep loan documents until the loan is paid off
2. Hold on to vehicle titles until the vehicle is sold
3. For stocks/bonds, keep investment purchase confirmation until you sell the investments unless that info appears on your statement (in order to establish your cost basis and holding period)
4. Receipts for home improvement (help offset capital gain taxes when the property is sold)

Category 3 – Papers to keep for seven years:
1. Keep tax records for seven years. (if you fail to report more than 25 percent of your gross income on your taxes, the IRS has six years to collect from you.)

Category 4 – Papers to keep indefinitely:
1. Military discharge papers
2. Birth certificate
3. Estate planning documents
4. Life insurance policies
5. Social security card
6. Marriage certificate
7. Inventory of your bank deposit box

Michelle Crouch, who writes about personal finance, states: “The IRS considers electronic documents as good as paper. Just make sure you encrypt the files and store backup copies on a USB flash drive, a CD, a DVD, a portable hard drive or with a web-based storage service.”

Tanza Loudenback, who writes for Business Insider, says: “Anything with an original signature or a raised seal needs to be kept in its original condition”:
• Birth certificates
• Citizenship papers
• Custody agreement
• Deeds and titles
• Divorce certificate
• Loan/mortgage paperwork
• Major debt repayment records
• Marriage license
• Military records
• Passport
• Powers of attorney
• Stock certificates
• Wills and living wills

One of my personal goals for 2018 is being more organized than ever. And knowing what documents I need to physically keep, what I am allowed to save in an electronic format, and what I can throw away eases my mind so that I don’t worry about not doing the right thing in saving important papers.

Rosalie Kramm, RPR, CRR, is a court reporter and firm owner in San Diego, Calif. You can follow her blog at www.kramm.com/blog