William Penn Life, 2003 (38. évfolyam, 1-12. szám)
2003-01-01 / 1. szám
MoneywiSe I Bank records: Keep ’em or toss ’em? A brief guide on which documents you should hold onto and which ones you should throw away and when m THAT'S A QUESTION YOU MAY not have asked yourself very often, if ever. But, it’s one you should ask yourself at least once a year. We can’t stress enough the importance of regularly checking the beneficiaries listed on your life insurance policies. It is the only way to ensure that the people you want to receive the benefits of your life insurance are the ones who will receive it. Think about the changes that have occurred in your life since you purchased your life insurance. Getting married, having children, losing a loved one, getting divorced, getting remarried-all these life changes affect your responsibilities. Do the beneficiaries currently listed on your life insurance policies reflect such changes? If you think you need to update the beneficiaries listed on your policies-either primary or secondary beneficiaries—contact your WPA representative. Or, call our Home Office toll-free at 1-800-848-7366. BANK STATEMENTS, CREDIT card bills, canceled checks, ATM receipts— you know these documents can come in handy. But you may be saving some bank records too long and others not long enough. No one can tell you when it's safe to throw away certain financial documents-that's for you to decide, perhaps after talking with your accountant or attorney. But, we can tell you that it's important to develop a plan for managing all this paperwork. Maybe the most compelling reason for this: Federal tax rules require you to have receipts and other records that support items on a return for as long as the IRS can assess you additional tax. "Under most circumstances," says Rick Cywinski, an FDIC tax policy manager, "the IRS can assess a tax up to three years from the date you filed your tax return, but it's six years if the IRS suspects you underreported income by more than 25 percent," something he says can happen to even the most honest person if you make a serious blunder. We offer the following record retention system as a reasonable approach for many people: Canceled checks: Those with no long-term significance for tax or other purposes probably can be destroyed after about a year. But canceled checks that support your tax returns, such as charitable contributions or tax payments, probably should be held for at least seven years—long enough to cover the six-year tax assessment period that starts when you file your tax return for the year the check was written. And, keep indefinitely any canceled checks and related receipts or documents for a home purchase or sale, renovations or other improvements to a property you own, and non-deductible contributions to an individual retirement account. Deposit. ATM, credit card and debit card receipts: Save them until the transaction appears on your statement and you've verified that the information is accurate. Credit card and bank account statements: Save those with no tax or other long-term significance for about a year, but save the rest for up to seven years. If you get a detailed annual statement, keep that and discard the corresponding monthly statements. Be sure to mark closed deposit accounts as such, so your heirs don't waste time wondering what happened to the money. Credit card contracts and other loan agreements: Keep for as long as the account is active, in case you have a dispute with your lender over the terms of your contract. Documentation of your purchase or sale of stocks, bonds and other investments: Retain these while you own the investment and then seven years after that. Finally, before tossing away any document that contains a Social Security number, bank account number or other personal information, shred it to avoid becoming a victim of identity theft. |ff|>|;| Money Links For more on financial record keeping, log onto the Internal Revenue Service website at: O www.irs.gov 4 William Penn Life, January 2003
