Important Papers - What to Keep, What to Throw Out
Nashville, Ark. – Each year as I organize tax information and complete the necessary forms, I always wonder what I can and what I cannot get rid of. This is a common question among many people especially when it comes to keeping tax records.
In most cases the Internal Revenue Service (IRS) has three years to audit federal income tax returns. In unusual cases, this limit does not apply. If you failed to report more than 25 percent of your gross income, the IRS has six years to collect the tax or start legal proceedings. There is no limit if you failed to file a return or willfully filed a fraudulent return. Some experts recommend keeping your actual tax returns for life. Receipts, statements and W-2s should be kept for at least seven years. Receipts are important because the IRS doesn’t accept a cancelled check as proof of payment. However, your bank statement can help you recall certain purchases; therefore, you might want to keep them.
Store the records you will need to keep in a safe place. You will want to keep a permanent file of items that are necessary to keep forever. They would include birth certificate, warranty deeds, marriage license, death certificates, and other important papers. It is also a good idea to keep all medical bills and insurance claims until they have been paid in full.
Items to discard include receipts that are not needed for proof of purchase or income tax purposes; for example, checks for groceries, clothing, and monthly utility bills. Keep a record of any major purchases such as appliances or furniture. You can discard them when you replace them. You do not need to keep sales receipts that have been recorded in your checkbook or family account record book unless you plan to use them for tax purposes. Discard warranties that have expired. Also discard any owner’s manuals of items that you no longer have.
Records should be stored in a way to prevent damage as well as loss. Be sure to keep the records where they will not mildew or get wet. File cabinets are the most common place to keep records at home.
Setting up the home filing system can be quite a chore. The University of Arkansas Cooperative Extension Service has some great factsheets to help you. They include “A Sample Filing System”, “Household Inventory”, “Preparing Family Net Worth and Income Statements”, “Replacing Valuable Papers”, and “Safe Deposit Box Inventory”.
You may decide to store your papers using technology. If you save your information electronically, be sure to protect your password on your computer and think twice about free online storage unless you are certain it’s encrypted.
Care should also be taken in destroying your important papers. A safe rule of thumb is shred anything that includes your name, address or any other sensitive information. Our local recycling center will shred paperwork for you while you watch. It takes only a few minutes, but it can help protect your identity. Items to shred might also include utility bills, credit card statements and receipts that are no longer needed.
If you would like more information on how long to keep important papers or if you would like a copy of any of the factsheets mentioned, feel free to contact the Howard County Extension Office at 870-845-7517 or visit our office located on the second floor of the courthouse.
Recipe of the Week
Springtime makes me think of great desserts. Here is a great, easy dessert that is impressive. A great dessert for any occasion.
Fancy Angel Food Cake
1 Angel Food Cake
Juice of 1 ½ lemons
1 (14 oz.) can sweetened condensed milk
1 (8 ½ oz.) can crushed pineapple, well drained
1 (8 oz.) container non-dairy whipped topping
Slice the Angel Food Cake in three layers. Mix the lemon juice, condensed milk and pineapple together in a medium bowl. Fold in non-dairy whipped topping. Place bowl in refrigerator for 30 minutes. Remove from refrigerator and ice cake.
*Note: You can use an Angel Food Cake mix instead of a purchased cake. Just prepare according to directions on the box.
By Jean Ince
County Extension Agent - Staff Chair
The Cooperative Extension Service
U of A System Division of Agriculture
Media Contact: Jean Ince
County Extension Agent - Staff Chair
U of A Division of Agriculture
Cooperative Extension Service
421 N. Main St, Nashville AR 71852
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