gmhTODAY 08 gmhToday May June 2016 - Page 74

Spring Cleaning L ike clockwork, every spring we clean out and organize the garage, weed though the clutter in the kids’ rooms, and clear the cob webs from the rafters. But what about clearing out all the fi nancial documents, bills and statements we accumulate? • Mortgage documents, mortgage statements and HELOC statements. Keep mortgage documents for the ownership period of the property plus ten years to permanently. Keep mortgage and HELOC statements for the ownership period of the property plus seven years. First off, I highly recommend using a fi reproof safe or password-protected electronic fi le to store your retained documents. The following are suggestions for retaining some of the most common fi nancial documents: • Tax records pertaining to real property or “real assets” should be kept for as long as you own the asset, and for at least seven years after you sell, exchange or liquidate it. KEEP FOR 7 YEARS: • Federal and state tax returns. The IRS has three years from your fi lling date to audit your return and six years to challenge your return if it believes you underreported gross income by 25 percent or more. By Daniel T. Newquist, CFP®, AIF® Dan Newquist, CFP®, AIF®, Principal & Senior Wealth Advisor with RNP Advisory Services, Inc., a registered investment advisor, Morgan Hill. He can be reached at 408-779-0699 or dnewquist@ Securities offered through Foothill Securities, Inc., member FINRA/SIPC, an unaffiliated company. • Bank, credit card statements, and expense receipts. Keep statements, cancelled checks or receipts detailing itemized expenses claimed on your federal return, medical and health insurance payments, mortgage payments, home improvement expenses, business expenses or charitable contributions. • Payroll statements, W-2 and 1099 state- ments. If you own a business or are self- employed, retain your payroll statements for seven years or longer. KEEP WHILE ACTIVE TO PERMANENTLY: • Investment account statements, retirement account statements, and Form 1099s. Keep annual statements and 1099s until you close the account, and then up to seven years after the last security in the account was sold. (Hold on to your quarterly statements until you get the annual statement). • Cost Basis. Retain any record of your original investment in any type of security until you sell the investment. This will help determine capital gains or losses. Custodians are now required to report on cost basis of investments, however they may not have cost basis information on certain types of securities held in your account, especially if purchased elsewhere and transferred into the account. • Employee benefi ts statements. Keep the most recent year-end statement on fi le. • Paycheck stubs. Keep until you receive your W-2 form from your employer each year. • Insurance. Life, disability, health, auto, home … keep for the life of the policy plus three years. Invest in a safe-deposit box for papers that can’t be easily replaced: Original birth and death certifi cates, Social Security cards, passports, estate documents, wills and trusts, life-insurance documents, marriage and divorce decrees, military discharge information, vehicle titles and loan documents. If you choose password- protected electronic storage for your documents, make sure to keep a back-up copy on a drive that is stored in a fi reproof safe or safe-deposit box. For security and protection of your identity, dispose of all sensitive documents by shredding or other secure means. This article is intended for educational purposes only. It is not intended as investment advice. Always consult your fi nancial or tax-planning professional for guidance with respect to your specifi c situation. 74 GILROY • MORGAN HILL • SAN MARTIN MAY/JUNE 2016