Retention of Finanical Statements

[WinniWoman]

So I am pretty organized - understatment. But I am becoming overwhelmed with the number of paper financial statements I retain just in case- for IRS purposes.

What I need to know is what about brokerage statements where the financial company does not send you a year end statement that summarizes the previous 12 months? This pertains to regular ad IRA brokerage accounts. I have been keeping every single monthly statement , which each is several pages long.

Going through some files today I realized I did not retain the Beneficiary IRA monthly brokerage statements because our company combines them with the general- non brokerage Beneficiary IRA mutual fund account statement- of which those are summarized for the year- and so I didn't realize the brokerage ones were not summarized. Ooops....

So- I thought you are supposed to keep everything because you need to know about buying and selling for capital gains and all that stuff- but does that pertain to IRA's- beneficiary and regular IRA's, including Roths??

It's the same with our regular, non IRA brokerage account- I have kept every single monthly statement. But our company sends a tax document at the end of the year with everything figured out I believe (though I rarely buy or sell anything), so why would I need all these monthly statements?

Really- I will need a storage unit soon! It's crazy.

Anyone know?

 

[pianodinosaur]

It drove me crazy too. About 2011 I changed my home financial record keeping system. All my checks are written via Quicken. I scan a copy of the check stub with the receipt into my computer. This saves physical space and makes data retrieval much easier. My IRA and other investment reports are easily downloaded and stored in the appropriate folder. Bank account reconciliations and statements are also stored in the appropriate folder. This has made life much easier for my accountant as well.

 

[WinniWoman]

I am thinking we get the 1099 B and other year end documents to file taxes. Wouldn't those be enough?

 

[clifffaith]

We just had this discussion on Saturday. In this day and age surely the brokerage company has records of when things were bought? The result of our conversation was that Cliff just stuffed whatever we were looking at back in his file drawer. I've already served notice that none of my customer files are moving with us to Carlsbad whether they've hit the seven year mark or not (our accountant says seven years, I always kept ten just because we have room and every now and then I did have reason to dig around for order numbers if a customer had a repair).

 

[WinniWoman]

We just had this discussion on Saturday. In this day and age surely the brokerage company has records of when things were bought? The result of our conversation was that Cliff just stuffed whatever we were looking at back in his file drawer. I've already served notice that none of my customer files are moving with us to Carlsbad whether they've hit the seven year mark or not (our accountant says seven years, I always kept ten just because we have room and every now and then I did have reason to dig around for order numbers if a customer had a repair).

The thing is with stocks or funds you need to know the cost basis and all that stuff and so you need to keep the information for as long as you own it- until you sell it- that could be well over 7 or 10 years. In 2011- the law did change that said brokerage houses had to send you certain tax info., so anything prior to 2011 is not included. But there could still be other reasons to keep the info.

I know our brokerage house keeps them available on line for like 7 years I think. But that would not help you if you held a stock or fund longer than that or prior to 2011. Supposedly you are supposed to check their cost basis statements against your record. Yeah- right. Bad enough I have no life now....SMH...

 

[rapmarks]

Your brokerage keeps cost basis and will report it when you sell.
I have been told that any Ira annuity etc, just keep the last statement.
I have been reinvesting thru computershare in utilities since 1975, I have a paper where I addthe dividends to the cost basis every year after I file my taxes. Computershare keeps a cost basis but it doesn’t go back that far.

 

[pittle]

I can pull mine for the past 3 years at any time from the brokerage firm's website. We have only been with this company for 3 years, so I do not know how far back I can pull them. I recently did download all 3 years as PDF's and put into a file for each year. One for myself and one for hubs. That way, we do not have to have actual paper copies, but can at any time needed. Before we changed companies, I had notebooks for each year as they mailed monthly reports - the summary page was the most important one, but I kept them all.. I did toss the monthly info for 2001 - 2007, and still have 2008 up.

I would think the 1099 would cover everything.

 

[VacationForever]

We have gone paperless on everything. Anything prior to 2016 had gone through the shredder. I do save a copy of monthly statements to my computer. With Bernie Madoff's saga I read that his clients had to have hardcopy proof of value in their accounts for them to be repaid whatever their percentage of investments were after the Feds recovered whatever they could from Bernie Madoff.

 

[bbodb1]

We have gone paperless on everything. Anything prior to 2016 had gone through the shredder. I do save a copy of monthly statements to my computer. With Bernie Madoff's saga I read that his clients had to have hardcopy proof of value in their accounts for them to be repaid whatever their percentage of investments were after the Feds recovered whatever they could from Bernie Madoff.

Count me as another who scans and shreds documents.
I have electronic copies of anything and everything going back about 20 years but I definitely shredded the originals.
The scanned copies have always been accepted as proof of account ownership when I needed to show proof. Of course, YEMV.

 

[WinniWoman]

I guess I really do need to download them from now on. I always felt I wanted to have paper copies in case of any computer problems, but I can save the folder on a USB I guess.

I read that people should not rely on their Financial Company to keep everything online because there is a slight possibility they could go out of business and then you can't access the statements. So best to download them or print.

If the 1099 covers them all I suppose I should just get rid of them. I just have to go through them all and make sure nothing is prior to 2011.

Our landlord has a burning barrel outside and I am hoping to burn a lot of unnecessary paperwork this weekend. Less stuff to take when we move.

 

[SmithOp]

I am thinking we get the 1099 B and other year end documents to file taxes. Wouldn't those be enough?

This is all you need to save for tax purposes, not the monthly or even year end statement. The broker is required to send you a combined 1099 by Mar 15th, it will have 1099INT interest, 1099DIV Dividends, and 1099B Cap Gains transactions. For an IRA type account you only need the 1099R when you take a disbursement, you don’t pay taxes on the transactions until you withdraw.


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[WinniWoman]

This is all you need to save for tax purposes, not the monthly or even year end statement. The broker is required to send you a combined 1099 by Mar 15th, it will have 1099INT interest, 1099DIV Dividends, and 1099B Cap Gains transactions. For an IRA type account you only need the 1099R when you take a disbursement, you don’t pay taxes on the transactions until you withdraw.


Sent from my iPad using Tapatalk Pro

That’s what I was hoping to hear!

 

[bogey21]

Not owning anything has its benefits. I have nothing to retain...

George

 

[WinniWoman]

Not owning anything has its benefits. I have nothing to retain...

George

I just said to my husband last night- we would be better off not having anything. Why the heck did we even work? Health insurance would be free. We wouldn’t have to deal with the tyrannical IRS tax laws.

Or another option would be to just be oblivious like many people are.

 

[geekette]

The thing is with stocks or funds you need to know the cost basis and all that stuff and so you need to keep the information for as long as you own it- until you sell it- that could be well over 7 or 10 years. In 2011- the law did change that said brokerage houses had to send you certain tax info., so anything prior to 2011 is not included. But there could still be other reasons to keep the info.

I know our brokerage house keeps them available on line for like 7 years I think. But that would not help you if you held a stock or fund longer than that or prior to 2011. Supposedly you are supposed to check their cost basis statements against your record. Yeah- right. Bad enough I have no life now....SMH...

There should be a Position History. Download that to Excel, save it. Unless you are doing a lot of buys and sells, or collect dividends, not much is going to happen year to year so you could do this every 3-5 years. The good thing about having this is that if you change brokerages, you can make sure everything transferred correctly, including Position History. Sharebuilder kicked us to the curb but I was easily able to verify that all position history moved correctly.

Keep the tax forms, that's all you really need. But, I would also confirm that those are correct. Mistakes do happen.

 

[joestein]

Since we are talking about records. If you have paid off your mortgage, what should you keep? I have had four mortgages (five if you consider my first was an 80/15) over the last 18 years. I was recently going through my docs and trying to find the official payoff letter or lien removal for each of them. I think I found most, except for the 15% portion of the first mortgage.

Do you think any of the mortgage docs are necessary to keep? just the payoff/lien releases?

I was thinking of having a search done to see if anything is open on my home. Not sure if necessary or even how I go about it.

Joe

 

[Brett]

Not owning anything has its benefits. I have nothing to retain...

George

true, not owning any financial assets or real estate would simplify record keeping.
But remember to keep a map of where you buried your gold coins

 

[rapmarks]

Unnecessary to keep: all financial records of my mother in law and her second husband including ledgers they kept of daily expenditures from the last century which the stepson will not let me discard

 

[AnnaS]

I will need a storage facility too soon..........I hate to throw away/shred any of my documents. I always wonder will I need it to prove something. Is there a crook at the bank and my account information disappeared? Will Lincoln come back to me after I returned my leased car 5/6/7/8 years ago......it goes on and on.

I have had to provide copies of bank statement (I know I can get them from the bank), to show how long funds have been in the account and where they came from for various reasons.

I know years ago, I received a letter from Allstate asking me to fill out an accident report that I had not filed????? I said what? What accident? To top it off, it was about a year after the alleged date. Someone apparently saw a car hit some other car and took down the wrong license plates. I went to find my receipt from motor vehicle that I did not even own the car at the time and plates were returned. Easy, no hassle. Had I not had the receipt, more work from me to prove it was not me.

I also still have a lot of my parents and in-laws' documents

 

[klpca]

Let me now blow your minds. I keep hardly anything. Any financial documents that I need are also easily available online. Even back in the 1980's, our credit union did not return cancelled checks and that's when I discovered that I hardly ever needed them. Then they stopped sending paper statements and I discovered that I didn't need those either. Then I switched everything over to electronic records and not much has changed on my side, except that I no longer have to shred all of those financial documents.

Re: Stock basis - check that basis now and get it updated at your brokers. I doubt anything will ever be audited - in 2018 the audit rate for individuals was .5% . https://www.taxpolicycenter.org/tax...-staff-fewer-audits-and-less-customer-service You have a 99.5% chance of not being audited. If you still want to be able to prove basis, scan those documents, save to Google docs and one other place (USB) and shred that paper. You always need to be able to back up basis for any assets that you own and then sell, so try to keep some kind of a record of that, but otherwise, get rid of all of those papers. The IRS has three years from the date that you file to do an audit - more if you commit fraud, so don't so that - and in CA the state gets an extra year, so after 4 years, your return cannot be audited any more.

I do keep hard copies of my deeds, birth certificates, social security cards, and our marriage license. Every once in awhile, I need one of those - had to prove our marriage to my husbands employer this year during open enrollment, lol, but it's a rare event.

I have all of our tax returns going back to 1983, and it is a fun trip down memory lane, although about 10 years ago I just started keeping pdf's, so even that fun has ended.

There is no financial reason to keep the documents of dead people. The basis of the assets stepped up when they died, so the old basis is irrelevant. I suppose if there is a complex estate involved with multiple trusts, and a bunch of gift tax returns, I might keep a box of documents, but in that case there is definitely another copy at the attorneys or accountants office, so again, not necessary. Just keep the old love letters that they wrote, or things with sentimental value.

 

[Cornell]

Let me now blow your minds. I keep hardly anything. Any financial documents that I need are also easily available online. Even back in the 1980's, our credit union did not return cancelled checks and that's when I discovered that I hardly ever needed them. They then stopped sending paper statements and I discovered that I didn't need those either. Then I switched everything over to electronic records and not much has changed on my side, except that I no longer have to shred all of those financial documents.

Re: Stock basis - check that basis now and get it updated at your brokers. I doubt anything will ever be audited - in 2018 the audit rate for individuals was .5% . https://www.taxpolicycenter.org/tax...-staff-fewer-audits-and-less-customer-service You have a 99.5% chance of not being audited. If you still want to be able to prove basis, scan those documents, save to Google docs and one other place (USB) and shred that paper. You always need to be able to back up basis for any assets that you own and then sell, so try to keep some kind of a record of that, but otherwise, get rid of all of those papers. The IRS has three years from the date that you file to do an audit - more if you commit fraud, so don't so that - and in CA the state gets an extra year, so after 4 years, your return cannot be audited any more.

I do keep hard copies of my deeds, birth certificates, social security cards, and our marriage license. Every once in awhile, I need one of those - had to prove our marriage to my husbands employer this year during open enrollment, lol, but it's a rare event.

I have all of our tax returns going back to 1983, and it is a fun trip down memory lane, although about 10 years ago I just started keeping pdf's, so even that fun has ended.

There is no financial reason to keep the documents of dead people. The basis of the assets stepped up when they died, so the old basis is irrelevant. I suppose if there is a complex estate involved with multiple trusts, and a bunch of gift tax returns, I might keep a box of documents, but in that case there is definitely another copy at the attorneys or accountants office, so again, not necessary. Just keep the old love letters that they wrote, or things with sentimental value.

AGREE to all. I keep 7 years of tax returns, important personal docs like birth certificates, etc. But I'm not keeping stacks of papers for the slim-to-none chance that my tax return from 5 years ago will be audited.

 

[rapmarks]

The only document I didn’t have that I needed was a statement showing a charge for a safety deposit box. My aunts told me they had cleared out and closed their safety deposit box. Three years later, one aunt has died, the other has Alzheimer’s. The bank sends a bill for safety deposit box and insists my aunts had paid for it the year prior. I did not have their bank statements and could not get them online. I had to get a court order and have the box drilled open only to find it empty. At the time, the bank was In Tucson and we were traveling throughout the East coast. I even had to go to a branch of the bank to do certain paperwork which necessitated a long drive.

 

[Cornell]

The only document I didn’t have that I needed was a statement showing a charge for a safety deposit box. My aunts told me they had cleared out and closed their safety deposit box. Three years later, one aunt has died, the other has Alzheimer’s. The bank sends a bill for safety deposit box and insists my aunts had paid for it the year prior. I did not have their bank statements and could not get them online. I had to get a court order and have the box drilled open only to find it empty. At the time, the bank was In Tucson and we were traveling throughout the East coast. I even had to go to a branch of the bank to do certain paperwork which necessitated a long drive.

This is interesting that you mention this. Safe deposit boxes have been one giant hassle in my life. I have power of attorney for my mother's SD box -- yet the bank gives me a headache every time I go there to get in it. I emptied the contents of mine b/c it has just become such a PIA dealing the bank. I also resent the bank trying to pitch their "private investment services" every time I sign in to access the box. I now keep all my important documents at home in a fireproof box and my life has become a LOT easier.

 

[VacationForever]

When my mother passed away, I simply showed the certificate of death document and will, and they allowed me to open the box.

 

[pedro47]

I keep everything for four (4) fiscal years then I shred & burned my documents.