Whether you just have a personal bank account to keep track of or a more complicated business situation, keeping track of all of your financial paperwork can be overwhelming. Individuals and businesses can easily become overrun with various bank statements, tax forms and other financial documents. But with a bit of planning, that financial paperwork can be brought under control in no time.
Scan Documents
Whether you are saving receipts or random financial documents, there is no need to keep stacks of paper around your home or office. A document or receipt scanner can help you reduce clutter and get all of your financial paperwork in an easy-to-manage digital form. Even the Internal Revenue Service accepts electronic documents, which means you do not even need to keep tax documents in paper form. If you have some big ticket items or appraisal forms, you should scan those to keep as well. In the event that you need to file an insurance claim, the electronic documents will be accepted.
If you maintain a large amount of documents, a document scanner with an automatic document feeder (adf) is best. Check out our recommendation for the best adf scanner. These scanners allow you to stack and feed many pages at a time which is a big timesaver. There are also smaller portable options which are generally less expensive. Portable document scanners are more ideal in situations were you need to scan sporadically or can use a unit on the road.
Financial Institution Paperwork
If you are holding onto bank statements and other items from your bank, then it is time to check in their electronic offerings. Many financial institutions offer free access to bank statements and other financial documents from their website. The number of months which are available in the electronic archives varies by bank, but you can often pay a small fee for items which are not accessible on the web. Credit card companies also generally offer old statements as part of an online archive.
Tax Documents
If you have file folders full of tax documents, you might be able to throw away some of them. While there is no time limit on auditing in the case of fraud or failing to file a return, the time limit is 7 years under normal conditions. Since the IRS accepts digital documents and receipts, you can keep the past 7 years of tax returns stored as electronic files.
Other Things To Consider
Some financial document should be kept for a longer period of time. You can still opt for digital storage instead of actual paper storage though. If you own any investments, such as stocks, then you will want to keep those documents for your entire length of ownership plus an additional seven years after you sell them. If you are not yet drawing Social Security benefits, then you should retain all of your W-2s until that point comes. This is done as a safeguard in the event that your benefits are calculated incorrectly. For loans, you should only hold onto the year-end summaries until you get the balance paid off.
