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5 Financial Documents You Should Keep Safe (Plus How Long to File Them For)

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What are your financial documents? If you’re like most Americans, you probably don’t think much about them.

However, taking care of your finances is a huge part of adult life. By taking care of your finances, you’ll be able to live a secure and happy life. There are many financial documents you should keep safe (like certificates and insurance policies), but with today’s online world, it’s easy to lose track of them.

In this post, I’ll review five financial documents you should arrange to have safe, plus how long to file them for.

Section: Tax Returns: Forever

Tax returns are the most important financial documents you will ever keep. These documents prove your income and tax liabilities for the year. Tax returns are filed with the IRS every year, and even if you don’t owe any taxes, saving them is still a good idea if you want to file an amended return later.

If you have a legitimate reason to file an amended return after the due date (or extended due date), you should file it as soon as possible. You should also store these tax returns in a separate location from other papers and valuables, so they aren’t damaged in the event of fire or flood.

Pay Stub and W-2 Tax Forms: 7 Years

Your pay stub is a document that shows your gross pay for the year and deductions for taxes and benefits. In addition, it calculates your taxable income for that year, determining how much you owe in federal and state taxes.

In fact, pay stubs may be required when you’re conducting financial transactions such as making a mortgage application. So while it may seem unimportant on the face of it, keeping these documents over time does offer plenty of advantages in the long run. 

If you have a significant income, it can also affect your eligibility for certain credits and deductions. To ensure you’re using accurate pay stubs for your proof of income, you can create fake checkstubs online if you’re missing an old one and require it as a part of an application or documentation process.

Property Title Deeds: As Long as You Own the Property

If you own property, you’ll need to keep its title deeds safe. This requirement is because they will prove who owns the property and who owns it in equal shares (called co-ownership).

If one of the owners dies or loses their share of ownership, then the remaining owner will be able to claim their share via what is known as a right of survivorship. Therefore, keeping these documents safe from theft or damage is essential since they could be used as evidence if disputes arise over property ownership.

A Will or Trust Deed: Until Death Do You Part

A will or trust deed is a legal document that outlines how you want your property distributed in the event of one’s death. For example, if you’re married, it outlines who gets what property if both spouses die within five years of one another (or at any point after that). 

The will is generally revocable, meaning that if one spouse dies before their partner, they can grant their partner access to their assets without waiting until they die.

Financial Bills and Receipts: 3 Years

Financial bills and receipts are other common types of financial documents you’ll need to file appropriately. They include bank statements, utility bills, credit card statements, and other financial documents.

As long as they contain your contact information and are dated within three years of filing, they should be safe from being destroyed or lost in a fire.

Key Takeaway

The ultimate goal of keeping records is that if you ever have to go through the past, you have an accurate, realistic picture. History being what it is, there are plenty of things we would like to change but can’t. With these records and papers in place, you can at least be sure that no one could not use them against you in a financial dispute or situation.

 

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