Financial Record Retention

Ask the Organizer

How long should I save monthly mortgage payments?
Danielle Mazzeferro

We all suffer from an overabundance of paper in our households and workplace. One of the most frequent questions I get asked is how long we actually have to save the paperwork.

In regard to your specific question it is important to keep all annual statements from your mortgagee that include principal, interest, escrow information and real estate taxes. It is also suggested that you retain mortgage and tax receipts as well as cancelled checks. While I would love to tell you to get rid of these once your house is sold, it is recommended that these records should be kept indefinitely. For more information on what documents should be retained for your home I encourage you to check with your accountant and refer to IRS Publication #523 “Tax Information on Selling Your Home.”

Now that tax season is approaching there is no better time to organize all of your financial paperwork, whether you prefer to keep hard copies or scan the documents into your computer. This is the time of year we all begin panicking about gathering all those loose receipts, remembering where our donation slips were last seen and hoping the accountant does not get frustrated with us for losing the paperwork on our recent stock sale.

If you have an efficient filing system throughout the year preparing for taxes can be a breeze. When you sit down to fill out your taxes you will have everything you need and you might even enjoy filling out the forms. I know that’s wishful thinking! If you have an accountant he or she will thank you too.

To prevent paper overload stick to these simple rules and only keep what’s most important:
Tax returns: (7 Years) The Internal Revenue Service (IRS) has six years to challenge your returns. It is important to retain original copies of the return as well as supporting documents such as receipts.
Investment Records: (2 Years) You want to compile records of your trades. If your investment company or stockbroker sends you year-end summaries you can discard your monthly statements and reduce paper. In addition, you want to save records of all non-deductible individual retirement accounts to prove that you have paid taxes on that money.
Credit Card Bills: (1 year) Once you have reviewed the monthly statement it is permissible to shred it when the next bill arrives. However, if you are self-employed, you will want to keep your statements and file them with your tax records.
Bank Statements: (3 years) Be sure to attach your pay stubs and canceled checks when you file them.
Charitable Deductions: (6 years) Most likely you will be retaining these records with your tax returns therefore similar rules apply.
Medical Records: (6 years) Items to keep are receipts and insurance payments for dentists, doctors, hospitals and prescriptions.
Home Related Records: (Duration of home ownership + 7 Years) It is important to save real-estate records, transactions, property tax paperwork, warranties as well as the title and deed to your house. In addition, retain documents identifying home improvements such as contracts and receipts.
Vital Statistics: (Permanently) Passports, birth certificates, marriage and divorce papers must never be thrown away.

Kristin Mastromarino is a professional organizer and owner of Livable Solutions Professional Organizing and The Organized Lifestyle retail store in Guilford, CT. (www.theorganizedlifestylestore.com). You can e-mail her your questions at Kristin@livablesolutions.com.

Spring Cleaning

Ask the Organizer

When the weather gets warm I get really inspired to begin tackling my home projects, however that jolt of energy quickly gets squashed as I realize how much there is to do. How do you tackle your spring cleaning?
Julie M., North Haven, CT

Julie, I could not agree more that the warm weather gives us a renewed energy to focus on our surroundings. But as you point out, spring cleaning can be very overwhelming as the outdoor tasks again become a weekly ritual and calendars become more packed with warm weather events on the weekends.
The first thing that I suggest as you begin to tackle your spring cleaning is to make a plan. Don’t think that your whole house can be overhauled in one weekend. You will fade quickly and you probably feel more tired during the week because you didn’t find time to relax. Making a plan is as simple as walking through each area of your home and identifying what tasks need to be done in each room.
Prioritize according to the areas that need the most attention. Identify what supplies will be needed and who is going to be around to help accomplish the goals. For instance, if it is finally warm enough to tackle the garage be prepared with boxes to pack items for donation. Purchase some heavy duty contractor bags to throw away bulky items. Find out what the weekend hours of the local dump or transfer station is open so items can be tossed the same day that you complete the project.
Once you identify the different actions that need to be taken in each room, take out your calendar and plan when you can focus on each space. Identify when you are going to purchase supplies so they are ready the day you need them instead of grabbing them at the last minute during the project. Check that the day you plan your project coincides with your helper’s availability. If you need your friend with a pick-up truck to be there to help haul unwanted furniture from the garage to donation, scheduling ahead of time will help everyone be prepared and more efficient.
To help you better identify some great projects for the spring, I have provided a list below of my favorite spring cleaning activities. Knocking some of these off your list will give you a great sense of balance and energy for the new season!
• Clean out and detail your car. Getting rid of the winter salt and brightening up the interior can make you feel even more renewed this season.
• Donate winter clothing that was never worn all season, pack remaining clothes and unpack your spring/summer clothing.
• Match lids with your plastic containers in your kitchen and toss any pieces that don’t have a match. There will be less frustration dealing with leftovers this Spring!
• Clean out your sock and underwear drawers. If you can’t find a match for socks get rid of them. Keeping your quantities low will make putting laundry away much easier.
• Get rid of all your unread magazines and newspapers. Start the season with less reading burden.
• Purge your files to start new for 2010. Group your 2009 paperwork with your tax records and start the year with empty files.
• Clean out under your bathroom sink. Throw almost empty bottles, expired medications and any items that have become old or leaky.
Hopefully you will find some further inspiration from these ideas this Spring!
Kristin Mastromarino is a professional organizer and owner of Livable Solutions Professional Organizing and The Organized Lifestyle retail store in Guilford, CT. (www.theorganizedlifestylestore.com). You can e-mail her your questions at Kristin@livablesolutions.com.