Digital backups take up much less space than having multiple paper copies of your important documents. Another option is to go with cloud-based storage for essential paperwork. The past several years have seen an explosion of cloud-based solutions, including:. Using cloud-based storage not only saves on space, but also can be great for organizing and keeping your documents secure, since most services guarantee protection through encrypted networks. Many cloud-based solutions allow access through mobile devices, making your documents accessible almost anywhere in the world.
The last thing you want to do is shred something to save space, only to need it five years later. Throwing away documents with your trash exposes your information to anyone willing to do a little dirty work to steal your identity.
You might not realize how much information is present on your old bills, statements, voided and canceled checks and other financial documents. Your best option is to shred any documents that contain sensitive information before tossing them.
Either invest in a shredder for your home or utilize a professional shredding service. Many cities also hold free paper shredding days for residents. A financial life necessarily involves a significant amount of documentation—from monthly bank statements to insurance documents to the various materials required to file your taxes. Kevin Payne is a personal finance and travel writer who writes about credit cards, student loans, debt, credit, and family finances.
Kevin lives in Cleveland, Ohio with his wife and four kids. Select Region. United States. United Kingdom. Kevin Payne. Editorial Note: Forbes Advisor may earn a commission on sales made from partner links on this page, but that doesn't affect our editors' opinions or evaluations.
One Year Documents that fall into this category include non-tax-related bank and credit card statements, investment statements, pay stubs and receipts for large purchases. How to Store Financial Documents You can cut down on clutter by creating a reliable system for storing your financial documents. Paper Storage Many people choose to keep documents stored in a filing cabinet.
The past several years have seen an explosion of cloud-based solutions, including: Dropbox Google Drive Microsoft OneDrive iCloud Amazon Cloud Drive Box NextCloud iDrive Carbonite Using cloud-based storage not only saves on space, but also can be great for organizing and keeping your documents secure, since most services guarantee protection through encrypted networks. Before you toss them, double check to see whether anyone else you do business with might need them.
Creditors, business lawyers, and insurance companies all sometimes require you to keep records longer than the IRS does. This is really just another benefit to keeping digital records. Instead of worrying whether you should be keeping or getting rid of them, you can archive them permanently.
Or even better, digitize it. We're an online bookkeeping service powered by real humans. Bench gives you a dedicated bookkeeper supported by a team of knowledgeable small business experts.
Your bookkeeping team imports bank statements, categorizes transactions, and prepares financial statements every month. Get started with a free month of bookkeeping. This post is to be used for informational purposes only and does not constitute legal, business, or tax advice. Each person should consult his or her own attorney, business advisor, or tax advisor with respect to matters referenced in this post.
Bench assumes no liability for actions taken in reliance upon the information contained herein. Sign up for a trial of Bench. No pressure, no credit card required. Hard copy statements should be kept in a secure, fireproof location that can be easily accessed. It may seem easier to just keep your records forever rather than setting aside time to organize them.
It's not a great idea, though, primarily because of the potential for identity thieves to get them. Documents that should be shredded include the following:. When you're ready to dispose of your bank statements, make sure you actually shred them. Just ripping them in half, isn't going to stop identity thieves from piecing together your personal information. Shredders are now small, portable, and cheap. If your paper volume is enormous, shredding services can be bought.
Some banks will shred your statements for free on request. Checking Accounts. Actively scan device characteristics for identification. Use precise geolocation data. Select personalised content. Create a personalised content profile. Measure ad performance. Select basic ads. Create a personalised ads profile. Select personalised ads. Apply market research to generate audience insights. Some states still allow the deduction of these expenses. When you are self-employed, many of the expenses you pay for materials, supplies, marketing, office expenses, insurance, and travel can be deducted when you file your income taxes.
Certain utilities and expenses for operating a business from your home may also qualify. For self-employed individuals, it is often helpful to save receipts from every purchase you make that is related to your business and to keep track of all of your utility bills, rent, and mortgage information for consideration at tax time.
There are a few other receipts that you may want to save, depending on your personal tax situation. For some, it is beneficial to deduct your state and local sales tax on your itemized deductions, rather than the amount of state and local income taxes you had withheld from your paycheck. Typically, the deduction of sales tax only benefits a person with one or more large purchases for the tax year—such as a car, boat, RV, or home addition—that led to a greater amount of sales tax paid than the amount of income tax withheld.
If you meet this description, you'll want to save all sales receipts. Remember, with TurboTax , we'll ask you simple questions about your life and help you fill out all the right tax forms. Whether you have a simple or complex tax situation, we've got you covered. Feel confident doing your own taxes. Just answer simple questions about your life, and TurboTax Free Edition will take care of the rest.
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