One of the most critical – and sometimes hardest parts – of personal money management is keeping your financial records organized. By taking the time to clear out and organize your financial records, you’ll be able to find what you need, exactly when you need it.
Retirement Daily’s Robert Powell sat down with Jeffrey Levine, CPA and tax pro from Buckingham Strategic Wealth Partners on how to organize important documents and update records.
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Organize Important Documents NowWhat Documents Should You Keep?Keep documents that are difficult to obtain, such as:
Tax returnsLegal contractsInsurance claimsProof of identityHow Long Should You Keep Your Records?A good rule of thumb is to keep financial records and documents only as long as necessary. Here are some recommendations on how long to keep specific documents.
Records to keep for one year or less:Bank or credit union statementsCredit card statementsUtility billsAuto and homeowners insurance policiesRecords to keep for more than a year:Tax returns and supporting documentation (keep for at least 3 years after filing the return)Mortgage contracts (keep until the mortgage is satisfied and you have proof of satisfaction)Property appraisals (keep for as long as you own that property)Annual retirement and investment statements (keep annual statements but discard monthly or quarterly reports)Receipts for major purchases and home improvements (keep for at least 3 years after the property is sold)Records to keep indefinitely:Birth, death, and marriage certificatesAdoption recordsCitizenship and military discharge papersSocial Security cardQuotes| How to Get a Jump on 2023 Tax Season Jeffrey Levine, Chief Planning Officer, Buckingham Strategic WealthTheStreet Recommends: Shred It or Save It: A Guide on Organizing Important Documents
Video Transcript:Robert Powell: Do you want to get a jump on your 2023 tax return? Well, here to talk with me about that is Jeffrey Levine from Buckingham Wealth Partners. Jeffrey, what words of wisdom do you have for us?
Jeffrey Levine: Well, filing next year begins with being organized now. We are in the middle of 2022 and you won’t necessarily file your taxes for almost another year in some cases. Or actually, some of you may not file your taxes for even longer than that. And so with that in mind, it’s important to keep good records. Today, best to do it digitally because it’s backed up. You don’t have to worry about fires, floods, or things getting lost. But at the very least, having a place where you store everything related to your taxes is the most important thing.
And as a CPA, I can tell you, it’s always easier for me to go through someone’s files and get rid of the stuff that’s not that relevant than it is for me to say, hey, I think there’s something that should be here that’s not. Right, it’s better, it’s easier to have too much stuff than it is to be missing stuff. Over the years, I would say unequivocally, that those who are more organized and better prepared will have an easier time in the future and will pay less in tax.
Editor’s Note: TheStreet’s Zach Faulds produced this video and contributed to the writing of this article.