During the recent Financial Fitness Fair in Fairbanks, we were offered an opportunity to shred any sensitive financial documents that needed to be destroyed. Many people visited with me concerning what documents could be shredded and which needed to be kept. Knowing what can be discarded can help you keep the paper tsunami down and allow you to keep the valuable papers you need.
The short answer is that you should keep all papers that you might need to prove ownership of something, anything that establishes your identity, income tax records and even things that you need for future reference.
Let’s look at some particular instances that you might need to know about.
Tax records. The Internal Revenue Service can audit your records up to three years. So all your income tax records should be kept for three years after filing. That means right now we should have all those records from 2011 till now. However, the IRS can audit you up to six years later if you have underreported your income by 25 percent, filed a fraudulent return or if you failed to file. Supporting documents should be kept with your returns.
Property documents. My son spent some time this week replacing the title to a vehicle that had been misplaced. Had he done a better job of keeping up with the title, that money and time would have been saved. Keep titles to cars, deeds and household inventories as long as you own the property. Inventories are particularly valuable in establishing ownership in case of loss for insurance claims. Remember that household inventories can be made with a camera as well as by paper.
Identity documents. Items like birth certificates, adoption papers, citizenship, death certificates, divorce decrees, educational records and Social Security cards all should be kept in a safe place and should be kept permanently.
Guarantees and warranty. There’s nothing worse than not being able reset that clock after the electricity is interrupted. Keep instruction books, guarantees and warranties on all appliances and technology that you are using in your home. But go through that file or drawer to discard those that are no longer in use. In my efforts to clean out, I found the instruction books on four coffeemakers. Only one is in use now, so the others were discarded.
Insurance policies. What is covered in case of an accident? Knowing what is covered will save you time and frustration in dealing with accidents and insurance companies.
So, what can we throw away? Annually you can discard old bank statements, cancelled checks and receipts not needed for income tax purposes, records of discarded equipment, expired warranties and paperwork on anything that you have discarded.
How should these items be discarded? If it has any personal information on it, it should be shredded or cut into small pieces and scattered through several bags of trash. You cannot be too careful when it comes to your identity.
Now is the time to get your papers in order. Soon it will be the end of the year and we’ll once again be preparing our tax records. Now is the time to lay the framework so it will be easier.
Cooperative Extension has some great publications on home records that you’ll want to pick up, either online at www.uaf.edu/ces or at our Tanana District office at 724 27th Ave.
· “Keeping Home Records: What to Discard” will help you decide what you should keep and discard.
· “Valuable Papers Inventory” will give you an organized list of all those papers you should keep and be able to lay your hands on them immediately.
· “Replacing Valuable Papers” gives you information on how and where to go to replace those papers you are missing.
Be sure to sort, store and take care of all your valuable papers.
Roxie Rodgers Dinstel is associate director of Cooperative Extension Service, a part of the University of Alaska Fairbanks, working in cooperation with the U.S. Department of Agriculture. Questions or column requests can be e-mailed to her at email@example.com or by calling 907-474-7201.