Then, think about tax documents, which you need to save for three years after filing. Certified public accountant John Madison of Ashland, Virginia, says the following documents are a start:
— Investment information, including when you bought and what you paid.
— Medical expense documentation, including health spending accounts.
— Business-related receipts.
— Receipts for charitable contributions.
This tax year has some twists: There’s a charitable giving deduction of $300 per taxpayer in the coronavirus relief package passed in late March, even if you don’t itemize. And if you’re receiving unemployment benefits or working in a different state during the pandemic, save documents related to those situations.
Finally, think about items such as warranties, other receipts and financial statements.
HOW SHOULD YOU ORGANIZE RECORDS?
First, the bad news: Throwing everything in a shoebox is not an organizational system.
“The shoebox works for no one,” says Lynnette Khalfani-Cox, aka “The Money Coach” author and former journalist who covered financial topics. Khalfani-Cox admits that she has done it, too. She says the shoebox is “a way for people to ‘maintain’ records without putting in an infrastructure and the initial hard work of organizing.”