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Modern Estate Planning Blog

Elder Law & Special Needs Planning

Organizing Documents For The New Year

November 23, 2020

If you feel like you are constantly buried beneath stacks of paper, it may be time to make a change and get organized. 

The more paper you have stacked on your desk, or hidden away in drawers, the harder it will be to find important documents when needed.  

Take some time to dig through your overflowing paperwork and throw out any outdated, unneeded documents, especially if they are only gathering dust. 

Reclaim your life (and your sanity) by sorting out your home or office space. 

If your paper stacks are full of outdated documents, receipts or are easily found online - shred and recycle them. No need to clutter your space with unnecessary piles of paper. 

For those papers you do want to keep, organize into neat folders and store away, so you know exactly where to find them when you need them most.   

Once you have cleared your desk space, you will feel more comfortable working and relaxed in your home or office - and will be at peace knowing anything of importance is neatly, safely filed away. 

How do you decide what to keep and what to throw away?

How long should you keep documents before throwing them away? 

A great rule to follow when debating whether to throw receipts away is:

Only keep the documents that are related to things you have deducted when you file your tax returns. 

You should save every tax-related document for at least seven years after you have filed the return. This is the length of time that the IRS has to determine that you owe additional taxes, provided you filed a return. 

If you did not file a return or filed a fraudulent return, you could be in serious trouble with the IRS - and they will want to see all of your original documents and receipts. This is one of the reasons why it is important to keep all your tax-related documents organized.

What about documents you are not deducting when you file your tax return?

For documents like bills, statements or receipts for items and services, it is really just your call. 

If you think you need to hold onto them, for whatever reason, then neatly file away in a folder to find them if needed, still keeping your home neat and tidy. Or, scan them to folders on your computer or cloud storage account.

What is the best way to get rid of paper?

Shredding is definitely the best way to dispose of your papers, especially if it has your account name, social security number, or any other important and private information.

Here are some helpful guidelines to assist you in keeping your home or office a little more organized and a little less filled with paper.

Throw away after one year

  • Automobile records (for a car you no longer own)*
  • Cable bills (household)*
  • Cell phone bills (personal)*
  • Certificate of deposit (expired/matured)
  • Credit card receipts and statements (personal)*
  • Passport (expired)
  • Professional dues (that you're not deducting)*
  • Receipts (items you didn't deduct or get reimbursed for)
  • Service agreements (expired)
  • Social Security statements (from prior years)*
  • Telephone bills (personal)*
  • Utility bills (household)
  • Warranties (expired)

*If you deducted this on your taxes, keep for seven years.

Throw away after three years

  • Loans (that you've paid off)
  • Promissory notes (that you've repaid)

Throw away after seven years

  • Accident reports and claims (related to a closed case)
  • Automobile records (for a car you donated to charity)
  • Bank account statements (back-up copies of financial documents on your computer's hard drive)
  • Brokerage statements (for stocks or mutual funds you've sold)
  • Cable bills (that you're deducting)
  • Canceled checks (for expenses you're deducting or for legal matters)
  • Cell phone bills (that you're deducting)
  • Certificate of deposit (that's related to your business and has expired)
  • Capital improvement receipts (related to real estate)
  • Charitable contribution receipts
  • Child care payment receipts
  • Credit card receipts and statements (for expenses you're deducting)
  • Dependent care payments
  • Flexible-spending account (receipts, statements)
  • Home office equipment, supplies (that you're deducting)
  • Insurance policy (for a home you've sold)
  • Interest expenses (that you're deducting)
  • Invoices (for items and services you're deducting)
  • IRS Form 1099, 1099-G or 1099-R
  • Lease agreements (related to rental income from real estate)
  • Mortgage interest payment receipts
  • Property records (related to property you've sold)
  • Professional dues (that you're deducting)
  • Purchase documents (related to property you've sold)
  • Sale documents (related to property you've sold)
  • Stock option agreements (that you've exercised)
  • Tax returns (personal and business)
  • Telephone bills (that you're deducting)
  • Title to real property (that you've sold)
  • Utility bills (that you're deducting)

Always keep deeds to a property for as long as you own the property and for at least 7 years after you’ve sold the property. 

Keep stock certificates and brokerage statements for as long as you remain the owner, and then for at least 7 years after you’ve sold them.

Call The Chubb Law Firm today at (916) 241-9661 to review your goals and discuss your options.

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