Everyday Living

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Record Keeping--What to Keep and Why!

Record keeping: different people use different record keeping systems and that is fine. The important point is to have a record keeping system, and use the system!

Why:

• Help to manage records and papers
• Prove what was done
• Remember what we have
• Protect our assets

Three places to keep records:

• Wallet
• Fire-resistant or safe deposit box
• Home filing system

Store in wallet:

• Identification cards
• Health insurance cards
• Emergency medical information
• Other cards used often

Store in fire-resistant or safe deposit box:

• Birth & Death Certificate
• Marriage license
• Separation papers
• Divorce papers
• Military Papers
• Deeds and titles
• Household inventory
• Will (if attorney does not have )
• Contracts
• Other important legal papers

Home Filing System: Where you set up groups of records using envelopes, file folders, shoe boxes, desk drawers, shelves or other devices.

Keeping Records Up-to-Date:

• Go through records at least every year
  • a few at a time or all at once
• Throw out those records that:
  • have expired
  • have been replaced
  • are no longer important to you
  • no longer needed to prove or protect something important to you
  • no longer help you remember something important

Tax Records--should be kept three to seven years because of possible audits by the Internal Revenue Service. Normally, the IRS audits within 3 years. However, the IRS may audit tax returns for up to 7 years if they believe you earned 25% more money than you reported. In cases of suspected tax fraud or failure to file a tax return, the IRS has no time limit for audits.

Bank Records--should be kept 3 to 7 years to prove information on tax returns. Cancelled checks should be kept for the period of time your purchase is covered by a guarantee or warranty.

Records related to Home Improvements--should be kept as long as you own your home.

Different rules may apply to special cases, such as records related to a home-based business.

Remember--if we never throw records away, we will end up with too much clutter and may not be able to find our important records.

Fact Sheet prepared by Ellen Burton and Mary Ann Fugate, Extension Educators, University of Illinois Extension, September, 2001

January 9, 2004

E-mail:

Consumer and Family Economics
Department of Agricultural and Consumer Economics
University of Illinois Extension
University of Illinois Urbana-Champaign