When working with clients to organize paper clutter, I find that there is a common thread as to why the paper is piling up and the files are bursting. People are just unsure of how long they need to hold onto important paperwork. And this is understandable! Between our business and personal records, varying government, company, or industry guidelines, it can be hard to know the expectation for each piece of information that comes across our desks and email inboxes.
When it comes to Legal and Financial records, the method we use for deciding what to keep and what to toss is different than for our reference files. Below is a list of guidelines that I’ve compiled to help with basic record retention in the home.
- Bank Withdrawal & Deposit Slips Check with your bank statement (or online) to make sure the amounts match up, then shred
- Bank Statements Keep these for one year, unless you own your own business, in which case you should hold onto them for 6 years from the year you file taxes
- Standard Household Receipts Enter into monthly budget, then shred
- Expense Receipts Child Care, Medical, Work Expenses, RRSP Contributions, Alimony/Child Support Paid, etc. Keep with tax records for 6 years from the year you file taxes
- Receipts Attached to a Warranty Keep until the warranty expires, or you no longer have the item, then shred
- Credit Card Receipts Keep until you can check it against your credit card statement, then shred
- Donation Receipts Keep with tax records for 6 years from the year you file taxes
- Receipts for Major Home Improvements Keep for as long as you own the home
- Utility, Internet, Phone, Cable, etc. Bills & Statements If you own your own business, or work from home, and can claim part of these as an expense, keep for 6 years from the year you file taxes. If not, you may choose to:
- Keep for 1 year, using a 1 in 1 out system to allow for comparison of rates OR
- Keep until you receive the next statement that shows a $0.00 balance
- Monthly Credit Card Statements Keep these for 1 year, unless you own your own business and have purchased items with your credit card. If this is the case, keep for 6 years from when you file taxes.
- Monthly Mortgage Statements Reconcile with your annual statement, then shred
- Annual Mortgage Statements Keep for 6 years from the year you file taxes
- Pay Stubs Reconcile with your T4, then shred
- Tax Returns Keep for 6 years from the year you file taxes
- All T4 Forms Keep for 6 years from the year you file taxes
- Auto, Home, Life Insurance Policy Information Keep as long as the policy is still active, and there are no unresolved claims. If there are unresolved claims, keep all insurance records until the issue is resolved
- Auto Records Keep as long as you own the vehicle
- Real Estate Paperwork & Mortgage Contracts For as long as you own the property
- Mortgage or Loan Discharge Records Keep 6 years from the year you file taxes
- Warranties Keep until they expire, or you no longer have the item
- Investment Monthly Statements Reconcile with your annual statement, then shred
- Investment Purchase Records Keep as long as you own the investment
- Investment Sales Records Keep 6 years from the year you file taxes
- Adoption Records Keep Forever
- Birth / Death Certificates Keep Forever
- Marriage Certificates Keep Forever
- Divorce Agreements / Custody Orders Keep Forever
- Medical Records Keep Forever
- Wills / Executor Information / Power of Attorney Keep Forever
These guidelines were developed based on best practices, as well as requirements of the Canada Revenue Agency. If you are still in doubt about shredding a document, you could do one of the following:
- Ask your lawyer or accountant if there are any specific guidelines that you must adhere to.
- Ask any community organizations you may be involved with if they have any guidelines that they require you to follow as well.
- Contact the institution that provided the document to you as they may have recommendations for retention.
A Few Notes on File Storage:
If your filing space is limited in your home office, you may consider filing your long-term records (for example, previous years tax information) in another location in your home. Be sure to store them in a cool, dry, space in an appropriate file box to prevent any damage. Also ensure that you label the box for easy retrieval.
Important documents such as bank statements, estate-planning documents, pension information, and tax information could also be stored in a fire-proof safe or a password protected file online for added security.
Documents that are difficult to replace such as birth/death/marriage certificates, life-insurance documents, wills, passports, SIN cards, etc, should also have an added level of protection if possible. A fire-proof safe or safe-deposit box are both good options.
A Few Notes On Disposal
Once you have determined which papers you are going to part with, be sure to shred any documents that contain any personal information. There are many services that provide shredding, however I recommend investing in a small paper shredder for your home if you don’t have one already.
I spoke a lot of shredding in this post, however these guidelines can be applied to digital files as well. I you have a lot of sensitive digital information you are ready to get rid of, I would recommend reading Disposing of Your Electronic Media from the Information and Privacy Commissioner of Ontario.
A Few Notes If You Own Your Own Business
Remember, if you own your own business, you need to keep your business paperwork separate from your personal paperwork. This will make filing taxes easier, and will avoid any hassles if audited.
Please note that some record retention guidelines are different for businesses than for personal documents. Check with your accountant or Lawyer prior to purging any documents. You can also read the CRA Guidelines on Record Keeping, which are a great resource.
Tackling paperwork that has built up over time can seem overwhelming, but knowing what to keep and what to toss can help you focus on reducing the clutter and help you reclaim your office space.
Are you ready to get started? You can download the printable version of this list here.
Are you ready to take control of the information in your office? If you need additional help managing information flow, or creating or revising custom filing systems, please reach out here to set up a 15 minute call. I’m always happy to help!