Tips for Storing Financial Records

storing financial records

This may come as a surprise to you, but some people don’t have a great system for organizing and storing financial records. If boxes of receipts and heaps of papers on your desk at home sound familiar, there might be something here you can learn! It could save you time and energy when next tax season rolls around.

It’s important to remember that your financial statements and documents contain different pieces of information about you. Don’t just throw them away! This information can be pieced together, and could spell trouble for you if it’s not shredded. Here’s a tip from the professionals at TSLNH: each year during tax season, most Office Depot stores allow you to shred up to five pounds of records for free until April 29.

Organizing Your Tax Documents

It’s best to store your tax returns for up to three years. Other sources recommend waiting until the statute of limitations runs out for filing your tax returns or filing for your tax refund. Tax-related legal documents and bank account statements should also be stored.

A filing cabinet with color-coded folders can work wonders when it comes to organizing and storing your financial records! Every six months or so, you can pull out the documents and reevaluate which ones should be stored and which can be shredded, based on updated or new information you’ve received.

storing financial records

Long-term File Storage

If there’s a chance of mold or pest damage in your storage space, it’s best to store long-term documents securely. Plastic bins are a great option if you are storing your financial records in your attic or basement. For original documents like birth and marriage certificates, consider investing in a fireproof box, or use a safety deposit box at your local bank.

Electronic File Storage

In today’s world, it’s always a safe plan to store files electronically as back-ups.  In fact, the IRS advises that this is an “outstanding way to secure your financial records.” Important files should be scanned and saved to a portable hard drive as a safety precaution.

Protecting Your Tax Documents

Tax season is a great time to set into place the file storing habits that will serve you well all year long. When next season rolls around, you’ll be well ahead of the game! For more information on which documents to save and best practices for storing financial records, get in touch with TSLNH today!