Almost everybody has a place in the house where the bills land before they are paid.
For some it's a desk, table or countertop. For others it's an office. But no matter how big, it is probably one of the most cluttered places in the house.
In the case of my husband and me, it is the den in our basement. It is also a home office where my husband prepares for the classes he teaches or I occasionally write and revise stories. Until May, it was also where my husband did the bulk of the work for his now-finished dissertation.
With my husband's degree behind us, this fall we decided it was time to do more than stack the papers into sort-of neat piles and stuff papers into already bulging files.
We realized the den needed a total overhaul. Papers were lying on the floor and even floor-to-ceiling bookshelves were overloaded.
So over the course of three weekends, we began the tedious process of deciding what stayed and what went. Not since I moved here 12 years ago had I gone through my files.
Some of the choices were easy. I shredded all the paperwork from a car loan I paid off about eight years ago.
Others were harder. How long do you need to keep credit card or utility bills? What about records from bank accounts?
After stumbling through the process, I figured we weren't alone. I bet lots of families face this situation and might even avoid the task, worried they'll pitch too much.
If one of your New Year's resolutions is getting your personal financial records organized, here is some advice.
It comes from Helen Belloni, a supervisor and certified public accountant at Presnell Gage in Lewiston.
Before I share Belloni's suggestions, consider some general advice.
When you throw away documents, Belloni says, be sure they're destroyed, not just tossed in the trash or a recycling container, where an identity thief could find them.
Belloni recommends a high- quality shredder.
One option Belloni says is worth considering is scanning your records, putting them into a pdf format and storing them on CDs.
That makes it possible to store financial information in much less space than if everything is on paper.
Keep in mind that these are general suggestions and might not apply to every individual's financial situation, so it would be a good idea to talk with a financial professional, Belloni says.
Items to keep permanently
Income tax returns, including W-2 forms. These documents can be helpful in establishing a right for Social Security or disability. Someone might be using your Social Security number without your knowledge, or your employer might be deducting Social Security payments from your pay, but not forwarding them to the government.
In either case, the tax returns and W-2s are useful in showing your contributions.
Documents that establish the purchase price and value of investments such as stocks, retirement funds or IRAs.
Documents that establish ownership, such as real estate deeds, vehicle titles and other real estate documents.
Contracts for property sold on an installment transaction.
Leases that are in effect, including those for cars or housing.
Insurance policies for health, housing and vehicles.
Wills until they are updated, then destroy the prior will.
Marriage and birth certificates.
Divorce decree and custody statements.
Documents that set the terms of loans that are still outstanding.
Items to keep for at least seven years
Supporting documents for tax returns, including Form 1099 for reporting interest and dividend income or Form 1098 for reporting mortgage interest and sometimes property taxes paid.
The IRS can audit income tax returns as far back as three years and investigate as far back as seven years if the agency has concerns that income might have been misrepresented.
Bank statements, check registers, check copies and canceled checks for open and closed accounts.
These records can be helpful in an IRS audit, especially if other documentation has been lost.
Documents about cafeteria plans or pre-tax income that is used for dependent or medical care.
By law, the administrator of the plan, whether it's your employer or a third party, is required to keep these documents on file. But as a precaution, it is a good idea to keep your own set.
Items to keep for one to three months or as long as you want
Utility bills
Credit card bills
Mortgage receipts
Telephone bills
Cell phone bills
Car maintenance records
Typically, any questions with one of these bills will arise within a few months.
Remember if any of them support income taxes, they should be kept at least seven years.
Car maintenance records fall into the same category, but are a little different. If you might sell your car, they can be useful in showing you've completed all factory- recommended maintenance. In that instance, you would keep the documents as long as you own the car.
------
Williams may be contacted at ewilliam@lmtribune.com