Thursday, January 14, 2010

Tax Time is For Keeps?

What to keep, what to throw? Here's some tips or help that you want to "hold onto".

It's the start of a new year, and tax season's not too far off. Here are the financial records to keep, and for how long.

Toss Every Month

* ATM And bank-deposit slips, after you've recorded the amounts in your check register and checked them against your monthly bank statement.
* Credit-card receipts, after you've checked to make sure the item appears correctly on your monthly statement.
* Sales receipts for minor purchases, after you've satisfactorily used the item and if it has no warranty.

Toss After One Year

* Monthly bank and credit-card statement (if you don't itemize deductions).
* Monthly or quarterly brokerage and mutual-fund statements, after you've reconciled them with your year-end summary.
* Monthly mortgage statements, as long as your year-end statement clearly shows the total amount you've paid in interest and property taxes over the course of the year.
* Phone and utility bills (as long as you don't have a home office, use your phone for business calls, or anticipate any need to prove long-term residency).
* Paycheck stubs, after you've reconciled them with your annual W-2 or 1099 forms.

Retain for Seven Years

* W-2 AND 1099 forms.
* Year-end statements from credit-card companies.
* Phone and utility bills (only if you deduct any portion for business expenses, have more than one home, or have moved within the past few years).
* Canceled checks and receipts/statements for: annual mortgage interest and property taxes, deductible business expenses, child-care bills, out-of-pocket medical costs, or any other tax-deductible expense.

Keep Indefinitely

* Your annual tax returns. Your year-end summaries from financial-services companies.
* Confirmation slips that list the purchase price of any investments you own.
* Home-improvement records.
* Receipts for major purchases. (any item whose replacement cost exceeds the deductible on your homeowners' or renters' insurance policy).
* Beneficiary designations.
* A very rich old man that want's to leave you everything!!!

Happy Returns :)

No comments: