How long before I can get rid of this?!?!
How long before I can get rid of this?!?!
and tips on how to store it.
If you are like me, you enjoy the moment a document is no longer relevant and get rid it in a secure way ASAP! Here’s how long you should keep stuff and how to store it.
Personal Financials:
This includes bank statements, tax returns, etc. In general, 7 years OR as long as the document has relevant information plus 7 years. For example, if you are deprecating property over 27.5 years, keep the data on the property for the entire 27.5 years + 7 years after it’s done. This number changes depending on what kind of transaction the records relate to. The IRS has spelled out a few additional timelines you should keep something for. The IRS explicitly says to “Keep records for 7 years if you file a claim for a loss from worthless securities or bad debt deduction”. I suggest to clients and others that keeping documents such as copies of insurance policies in perpetuity in some form, even if you PDF it and keep it on an external hard drive or secure cloud.
Something very few investors pay attention to, but absolutely should, is make sure you have a basis for each holding before tossing that trade confirmation. Prior to 2011 custodians and brokerage firms were not required to keep basis information for you. If you don’t have a cost basis for each position, work with your adviser and accountant to see if you can formulate it.
Business Documents:
You are going to want to keep things such as articles of incorporation, annual reports, and operating agreements in perpetuity. This is in addition to anything else you will need to keep on hand such as your company EIN and TIN. You will want to follow IRS guidelines for document retention or your regulatory guidelines if they are longer than the IRS guideline.
How Should I Store Info?
Many people, hate having paper around, from clutter to it not being searchable and able to be destroyed, there are a few reasons to have a digital back up. For this, we got some tips from Robert Tafaro of Matrix Technology Solutions in Metairie, LA.
You Get What You Pay For: “Users should stay away from free solutions. Remember, you get what you pay for! Free solutions do not usually include support and have little to no service level agreements. Users with a Microsoft 365 subscription or a Google G Suite subscription are already paying for storage as part of their subscription, no reason not to use what you already have.”
What should people look for in evaluating online storage security? “The first thing to looks for is the key/https in the browser [and] making sure your storage interface is encrypted is a must. The second thing to look for is making sure a provider has multiple redundant datacenters. Redundancy ensures you will always have access to your files if one of their datacenters is experiencing issues.” says Tafaro.
How many different places should people store items? “My recommendation is to have a single cloud storage platform as well as a local solution synchronizing files from the cloud. Synology NAS products include an application that will synchronize files from Google, Box, Dropbox and Microsoft OneDrive. These NAS products are easy to use and are portable and provide for redundant storage. A Synology NAS with two 4tb drives have a starting price point of around $600. Make sure you properly plan your NAS strategy and purchase for the future” says Tafaro. For example, “If you know you need 3.5 TB now, don’t buy a NAS limited to two drives, look at the 4 drive models and start with two drives and add two more drives when you need it.” according to Tafaro.
*This is not tax, financial, or legal advice, please speak with professionals about your unique situation*
