Today we are talking about Decluttering The Home Office- What Do I Keep? What Do I Trash? This year marks the 30 year anniversary of our home. With that comes 30 plus years of paper/files/folders. We have gone from the age of keeping everything (in case you need it) to a digital age.
What I need to decide is what to keep, what to trash. Also, I need to think about how I dispose of personal information and important papers that I no longer need to keep.
Decluttering The Home Office-What Do I Keep? What Do I Trash?
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What To Keep
Rules that use to apply, no longer do because of the ease of access to digital records. Anything relating to taxes, the rule still applies.
- Receipts for anything that is tax-deductible or itemized- keep for 3 years with your tax records
- Home Improvement records- keep for seven years if you plan to sell your house. These records can be used to lower your taxable gain
- Medical records- keep for one year for insurance verification purposes. For large medical expenses, you may be able to deduct from your taxes. New rules are expenses above 7.5% of your gross income. Those records will need to be saved for 3 years with tax records
- Pay Stubs or W2 forms– Keep til year’s end with tax records
- Utility Bills- Toss, unless you are claiming home office deduction. Then copies will need to be kept for 3 years with tax records
- Credit Card Statements-Toss, unless you need to keep for proof of tax deduction. Then keep for 3 years with tax records.
- Investment & Real Estate Records– Keep for three years, as you may need the documentation for the capital gains tax if you’re audited by the IRS. These records help track your cost basis and the taxes you owe when you sell stocks or properties. Once you receive the annual summaries, you can shred your monthly statements.
- Bank Statements-You’ll need bank statements for up to three years if you are audited by the IRS. If your bank provides online statements, you can switch to receiving your bank documents online and cut down on paper
- Tax Records-The IRS recommends that you “keep records for three years from the date you filed your original return or two years from the date you paid the tax, whichever is later.” If you file a claim for a loss from worthless securities or bad debt deduction, keep your tax records for seven years.
- Record Of Loans Paid Off– Keep For 7 years
- Active Contracts, Property Records, Insurance Documents Or Stock Certificates- Keep While Active. Many insurance documents can be found online.
- Marriage license, Birth Certificates, Wills, Adoption Papers, Death Certificates Or Records Of Paid Mortgages– Keep these documents forever
***This information comes from the website Her Money
Even More Keep
Even with the digital age, there are still some additional things to add to the keep pile
- Older appliance manuals/warranties. Many of those are not online but you can easily order a replacement part. Others are all online and the model numbers usually very easy to find.
- Children’s School Records/Medical Records- I will be organizing and turning these records over to my children. Then it is up to them to decide whether to “keep or toss”.
Toss It Or Shredd It
Many older records have personal information such as social security numbers that can be used for identity theft. I have become a “shredding machine”. If you have lots of paper that need to be shredded, I suggest you invest in a “quality shredder”. There are cheap models out there so beware, you will spend more time fixing the shredder then getting your work done (been there, done that).
I have also used large stacks of records as kindling in our weekend bonfires. Older banks statements work great, the newer ones are coated with something and do not burn well.
If you think it has valuable information that could be used for identity theft, then destroy it, shredded it, burn it, whatever. But do not put in the garbage.
Guess What I Am Doing This Weekend?
It is a daunting task, but you can gather files and watch your favorite Netflix movies while going through and shredding. My goal is to downsize the paper clutter that needs to be stored. Next, I will be organizing my files so that I can easily find important documents. Just like a closet decluttering, if there is too much stuff, you can’t find what you really need.
Can’t decide what to keep, toss, or donate- Check out The Great Purge on closet purging. Some systems of evaluation apply.